N.C. Farm Bureau Mut. Ins. Co. v. Dana

• Decision Date: 17 December 2021
• Docket Number: No. 374PA19,374PA19
• Citation: 379 N.C. 502,866 S.E.2d 710
• Parties: NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, INC. v. William Thomas DANA, Jr., Individually and as Administrator of the Estate of Pamela Marguerite Dana
• Court: North Carolina Supreme Court

379 N.C. 502

866 S.E.2d 710

NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, INC.

v.William Thomas DANA, Jr., Individually and as Administrator of the Estate of Pamela Marguerite Dana

No. 374PA19

Supreme Court of North Carolina.

Filed December 17, 2021

William F. Lipscomb, Wilkesboro, for plaintiff-appellant.

C. Douglas Maynard, Jr., Winston-Salem, for defendant-appellee.

Bailey & Dixon, L.L.P., by J.T. Crook, Raleigh, Philip A. Collins, and David S. Coats, Raleigh, for North Carolina Association of Defense Attorneys, amicus curiae.

ERVIN, Justice

¶ 1 The issue before us in this case involves the amount of underinsured motorist coverage that should be distributed to defendant William Thomas Dana, Jr., individually and as administrator of the estate of Pamela Marguerite Dana, from the policy of automobile liability insurance that Ms. Dana had purchased from plaintiff North Carolina Farm Bureau Mutual Insurance Company, Inc., for the purpose of compensating them for the injuries that they sustained in an accident that resulted from the negligence of Matthew Bronson. After careful consideration of the record in light of the applicable law, we conclude that the Court of Appeals erred by affirming an order entered by the trial court granting summary judgment in favor of the Danas and against Farm Bureau on 2 August 2018 in reliance upon its prior decision in N.C. Farm Bureau Mut. Ins. Co., Inc. v. Gurley , 139 N.C. App. 178, 532 S.E.2d 846 (2000) ; that its decision in favor of the Danas should be reversed; and that this case should be remanded to the Court of Appeals for further remand to Superior Court, Forsyth County, for the entry of a judgment consistent with the principles enunciated in this opinion.

¶ 2 On 3 February 2016, Mr. Bronson, who was intoxicated, was driving in a southbound direction on Old Salisbury Road in Winston-Salem when the vehicle that he was operating entered the northbound lane and collided with a vehicle owned by Ms. Dana, resulting in serious injuries to Ms. Dana and Mr. Dana, who was a passenger in Ms. Dana's vehicle. The injuries that Ms. Dana sustained ultimately proved fatal. Jessica Jones, a passenger in Mr. Bronson's vehicle, was also killed in the accident. A vehicle owned and operated by Joshua Ryan Jeffries was damaged in the accident as well.

¶ 3 At the time of the accident, Mr. Bronson's vehicle was covered by a policy of automobile insurance that had been issued by Integon National Insurance Company which provided bodily injury liability coverage with limits of up to $50,000 per person and $100,000 per accident. Subject to approval by the Superior Court, Integon proposed to apportion the full amount of the available per accident coverage as follows:

William Dana	$32,000
Estate of Pamela Dana	$43,750
Estate of Jessica Jones	$23,500
Joshua Jeffries	$750
Total	$100,000

¶ 4 At the time of the accident, Ms. Dana was insured under a policy of automobile liability insurance issued by Farm Bureau that included underinsured motorist coverage with limits of $100,000 per person and $300,000 per accident. In response to a claim submitted by Ms. Dana's estate, Farm Bureau offered to pay the full per-person limit to both Mr. Dana and the Estate, less the amount that had been received from Integon's liability coverage, resulting in the following distribution:

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¶ 5 In response, Mr. Dana argued that he and the Estate were entitled to the full amount of per-accident underinsured motorist coverage set out in the policy, less the amount of liability coverage that had been provided by Integon and the amount that had already been offered by Farm Bureau. As a result, Farm Bureau would be obligated to pay a total of $124,250 to the Danas under its own proposal, while it would be obligated to provide a total of $200,000 in underinsured motorist coverage to the Danas under the proposal that they submitted, which consisted of the $300,000 per-accident limit provided under the Farm Bureau policy less the $100,000 in liability coverage provided by Integon. As a result, the Danas claimed to be entitled to an additional $75,750 in underinsured motorist coverage over and above the amount that Farm Bureau had already tendered to them.

¶ 6 On 7 August 2017, Farm Bureau filed a complaint seeking a declaratory judgment concerning the amount of underinsured motorist coverage that it was required to provide to the Danas. After both parties filed competing motions for summary judgment, the trial court entered an order granting summary judgment in favor of the Danas on 2 August 2018. Farm Bureau noted an appeal from the trial court's order to the Court of Appeals.

¶ 7 In affirming the trial court's order, the Court of Appeals began by noting that it had, in Gurley , "established a straightforward analysis to determine in what amount, if any, [underinsured motorist] coverage is available, given both the insurance policy in question and our [underinsured motorist] statute." N.C. Farm Bureau Mut. Ins. Co. , 42, 44 (2019) (citing Gurley , 139 N.C. App. at 180, 532 S.E.2d 846 ). The Court of Appeals noted that, in "decid[ing] how much coverage the insured party or parties are entitled to, we must consider ‘(1) the number of claimants seeking coverage under the [underinsured motorist] policy; and (2) whether the negligent driver's liability policy was exhausted pursuant to a per-person or per-accident cap.’ " Id. (quoting Gurley , 139 N.C. App. at 181, 532 S.E.2d 846 ). More specifically, the Court of Appeals noted that it had held in Gurley that

[W]hen more than one claimant is seeking [underinsured motorist] coverage, as is the case here, how the liability policy was exhausted will determine the applicable [underinsured motorist] limit. In particular, when the negligent driver's liability policy was exhausted pursuant to the per-person cap, the [underinsured motorist] policy's per-person cap will be the applicable limit. However, when the liability policy was exhausted pursuant to the per-accident cap, the applicable [underinsured motorist] limit will be the [underinsured motorist] policy's per-accident cap.

Id. (quoting Gurley , 139 N.C. App. at 181, 532 S.E.2d 846 ). In view of the fact that the parties had stipulated that the Danas were entitled to collect some amount of underinsured motorist coverage and the fact that "the negligent driver's liability coverage was exhausted pursuant to the per-accident cap," the Court of Appeals held that " Gurley mandates [that] the [Danas] are collectively entitled to receive coverage pursuant to the per-accident cap of $300,000." Id. As a result, the Court of Appeals affirmed the trial court's order. This Court granted Farm Bureau's petition for discretionary review of the Court of Appeals' decision.

¶ 8 Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." N.C.G.S. § 1A-1, Rule 56(c) (2019).

Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that there is no genuine issue of material fact and that any party is entitled to judgment as a matter of law. When considering a motion for summary judgment, the trial judge must view the presented evidence in the light most favorable to the nonmoving party. If the movant demonstrates the absence of a genuine issue of material fact, the burden shifts to the nonmovant to present specific facts which establish the presence of a genuine factual dispute for trial. Nevertheless, if there is any question as to the weight of evidence summary judgment should be denied.

In re Will of Jones , 362 N.C. 569, 573–74, 669 S.E.2d 572 (2008) (cleaned up). In light of the parties' agreement that the present record does not reveal the existence of any material issue of disputed fact, the only issue that remains for our resolution in this case is whether one party or the other is entitled to the entry of judgment in its favor as a matter of law.

¶ 9 The North Carolina Motor Vehicle Safety and Financial Responsibility Act was enacted to ensure that every motor vehicle operator in North Carolina has "proof of ability to be able to respond in damages for liability [ ] on account of accidents ... arising out of the ownership, maintenance or use of a motor vehicle." N.C.G.S. § 20-279.1(11) (2019). For that reason, the Financial Responsibility Act prohibits the registration of any vehicle in North Carolina unless the owner maintains "proof of financial responsibility" in the form of a policy of liability insurance, with such policies being required to conform to the requirements of N.C.G.S. § 20-309(b) and to enable the owner to pay damages in the amount of $30,000 "because of bodily injury to or death of one person in any one accident, and, subject to said limit for one person, in the amount of" $60,000 "because of bodily injury to or death of two or more persons in any one accident." N.C.G.S. § 20-279.1(11). The Financial Responsibility Act's requirement that "each automobile owner [must] carry a minimum amount of liability insurance providing coverage for the named insured as well as any other person using the automobile with the express or implied permission of the named insured" is written into every policy of automobile insurance that is subject to the Financial Responsibility Act as a matter of law. Integon Indem. Corp. v. Universal Underwriters Ins. Co. , 342 N.C. 166, 167, 463 S.E.2d 389 (1995) (citing N.C.G.S. § 20-279.21(b)(2) ). Nationwide Mut. Ins. Co. v. Chantos , 293 N.C. 431, 441, 238 S.E.2d 597 (1977).

¶ 10 According to N.C.G.S. § 20-279.21(b)(2), a policy of automobile liability insurance must protect the named insured or a permissive user

against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of such motor

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