Nationwide Mut. Ins. Co. v. Lankford

• Decision Date: 04 April 1995
• Docket Number: No. 9310SC1143,9310SC1143
• Citation: 455 S.E.2d 484,118 N.C.App. 368
• Parties: NATIONWIDE MUTUAL INSURANCE CO. v. Steve E. LANKFORD, Linda Lankford, Walter Scott Lankford and Nancy B. Oldham.
• Court: North Carolina Court of Appeals

Page 484

455 S.E.2d 484

118 N.C.App. 368

NATIONWIDE MUTUAL INSURANCE CO. v. Steve E. LANKFORD, Linda Lankford, Walter Scott Lankford and Nancy B. Oldham.

No. 9310SC1143.

Court of Appeals of North Carolina.

April 4, 1995.

Bailey & Dixon by Dorothy V. Kibler and Kenyann G. Brown, Raleigh, for plaintiff-appellee.

Staton, Perkinson, Doster, Post, Silverman & Adcock by Jonathan Silverman and Elizabeth Myrick, Sanford, for defendants-appellants Steve E. Lankford, Linda Lankford, and Walter Scott Lankford.

JOHN, Judge.

In this declaratory judgment action, defendants-appellants (defendants) argue the trial court improperly granted summary judgment in favor of plaintiff Nationwide Mutual Insurance Company (Nationwide), thereby effectively barring defendants Steve and Linda Lankford (Mr. and Mrs. Lankford, the parents) and their son, defendant Walter Scott Lankford (Scott), from raising any claims for uninsured motorists (UM) coverage under the parents' insurance policy with Nationwide. We agree the parents were erroneously denied coverage by the court's ruling.

Pertinent factual and procedural information may be summarized as follows: On 19 March 1992, Scott (a minor child on that date) was operating a 1984 Chevrolet Camaro on Rural Paved Road 1001 in Sanford, North Carolina. Scott was seriously injured when a 1983 Dodge, operated by defendant Nancy B. Oldham (Oldham), crossed the center line and collided with his Camaro. It is undisputed that Oldham's vehicle was not covered by automobile liability insurance at the time of the collision, and that Scott's resultant medical expenses for his injuries totalled $19,229.41.

Nationwide had previously issued two personal automobile insurance policies to members of the Lankford family which were in effect on 19 March 1992--Policy Number 61-32-J-586-038 (Scott's policy) and Policy Number 61-32-B-499-546 (the parents' policy). Scott's policy, providing coverage for his separately-owned Camaro, contained UM coverage of $50,000.00 per person and $100,000.00 per accident. The parents' policy, listing a 1990 Nissan and a 1985 Ford as covered vehicles, also afforded UM coverage in the amount of $50,000.00 per person and $100,000.00 per accident.

Scott and his parents subsequently filed claims with Nationwide under both policies to recover their damages. On 8 June 1992, Nationwide tendered a check for $50,000.00 to the attorney representing the three, contending that sum represented the total amount of UM coverage applicable to the claims of both Scott and his parents. Nationwide's tender was rejected, however, and on 23 June 1992, two separate civil actions against Oldham were filed in Lee County Superior Court. In their action, Mr. and Mrs. Lankford sought to recover expenses incurred for Scott's medical care. Scott's separate lawsuit, brought on his behalf by guardian ad litem Linda Lankford, included claims to recover damages for "permanent physical injuries, scarring and great pain and suffering [and] ... severe emotional distress."

On 30 November 1992, Nationwide filed the instant action in Wake County Superior Court seeking declaratory relief under N.C.Gen.Stat. § 1-253 (1983) as well as a directive that the parents and Scott interplead their respective claims within the policy limits of UM coverage provided in Scott's insurance policy. Nationwide alleged "[t]he parents' policy provides no coverage for claims arising out of [the 19 March 1992] [ac]cident," and that "[a]ny and all claims asserted by [the parents] that arise out of the [ac]cident are derivative of Scott['s] ... claim for bodily injury." Nationwide sought a declaration that the parents' policy provided "no coverage ... for any damages which Ms. Oldham is or may become legally responsible [for] because of injuries to Mr. Lankford, Ms. Lankford, or ... Scott Lankford[.]" Nationwide further requested a determination that its "maximum limit of liability is $50,000.00, the liability limit for Uninsured Motorist Coverage under the minor child's policy." As all parties had stipulated that the combined damages of Scott and his parents exceeded $50,000.00, Nationwide further suggested that the court "adjudge which Defendant or Defendants is entitled to the sum of money or to any portion."

The parties subsequently filed cross-motions for summary judgment which were heard at the 28 June 1993 civil session of Wake County Superior Court. The court's order, entered 11 August 1993, denied defendants' motion and granted that of plaintiff, stating in pertinent part:

3. The total amount of coverage under any policy issued by Nationwide available to the Lankfords as a result of the March 19, 1992 accident between ... Scott ... and Nancy B. Oldham is hereby declared to be $50,000.00;

4. Nationwide, having previously deposited the sum of $50,000.00 with the Wake County Clerk of Superior Court, is hereby discharged from all liability under its Policy Number 61-32-B-499-546, issued to Steve E. Lankford and Linda Lankford, and Policy Number 61-32-J-586-038, issued to Walter Scott Lankford, including any obligation of any type arising out of the lawsuits pending in Lee County Superior Court ...;

5. Each of the Defendants Steve E. Lankford, Linda Lankford, [and] Walter Scott Lankford ... shall proceed to determine the amount of their claims and their interest in the $50,000.00 currently held by the Wake County Clerk of Superior Court;

6. Defendants are restrained and enjoined from any and all further attempts to recover amounts in excess of $50,000.00 from Nationwide....

Nationwide informs us that the monies held by the Clerk were disbursed to Scott following the court's ruling pursuant to the terms of a consent order signed by Scott, Mr. and Mrs. Lankford, the attorney representing both parents and Scott, and counsel for Nationwide.

________

Defendants appeal summary judgment in favor of Nationwide on grounds that "both policies of automobile insurance issued by [Nationwide] afforded coverage for the injuries and damages sustained by the Lankford Defendants."

In their appellate brief, Scott and his parents expound upon the above contention by presenting two basic propositions: (A) that the parents are entitled to recover for Scott's medical expenses under the UM section of the insurance policy issued them individually by Nationwide; and (B) that Scott may also recover under the UM coverage portion of their policy as a "person insured," despite certain exclusions from coverage contained within Scott's own policy. We find merit in defendants' discussion relative to Part A and hold the parents' personal contract of insurance provides coverage for their separate claims in this instance. However, we decline to discuss in detail the contentions raised in Part B, which contain internal inconsistencies and which at times are irreconcilable with other assertions made in defendants' brief.

A.

With respect to their first argument, defendants begin with the assurance that the parents "are simply seeking coverage they contracted for in their own policy for the injuries they sustained due to necessary medical treatment for their minor child caused by a negligent uninsured motorist." (Emphasis added). In other words, "[Scott] is not claiming on his parents' policy and the parents' [sic] are not claiming on [Scott's] policy." That being so, defendants correctly observe that "this is neither an intrapolicy [n]or [an] interpolicy stacking case." See, e.g., Mitchell v. Nationwide Ins. Co., 110 N.C.App. 16, 23-25, 429 S.E.2d 351, 354-56 (1993) (intrapolicy stacking involves aggregating the limits of liability for different vehicles insured under a single policy; interpolicy stacking means aggregating the limits of coverage contained under two or more contracts of insurance), aff'd, 335 N.C. 433, 439 S.E.2d 110 (1994); see also Proctor v. N.C. Farm Bureau Mutual Ins. Co., 335 N.C. 533, 534-35, 439 S.E.2d 112, 113 (1994).

The fundamental question herein, therefore, is whether the policy of insurance issued to the parents provides by its own terms UM coverage of their claim for reimbursement of Scott's medical expenses. Our consideration of this issue is guided by this Court's recent statement that, "[i]n determining whether coverage is provided by a particular automobile liability insurance policy, 'careful attention must be given to the type of coverage, the relevant statutory provisions, and the terms of the policy.' " Bray v. N.C. Farm Bureau Mut. Ins. Co., 115 N.C.App. 438, 441, 445 S.E.2d 79, 81 (quoting Smith v. Nationwide Mut. Ins. Co., 328 N.C. 139, 142, 400 S.E.2d 44, 47, reh'g denied, 328 N.C. 577, 403 S.E.2d 514 (1991)), disc. review allowed, 337 N.C. 800, 449 S.E.2d 565 (1994).

In the case sub judice, because of Oldham's failure to have in effect bodily injury liability insurance at the time of the collision, we are concerned with UM coverage. The relevant statute on 19 March 1992 (and now) is N.C.Gen.Stat. § 20-279.21(b) (1993), which comprises a portion of the Financial Responsibility Act and provides in part as follows:

(3) No policy of bodily injury liability insurance ... shall be delivered or issued for delivery in this State with respect to any motor vehicle registered ... in this State unless coverage is provided therein or supplemental thereto ... for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles ... because of bodily injury, sickness or disease, including death, resulting therefrom....

....

For purposes of this section "persons insured" means the named insured and, while resident of the same household, the spouse of any named insured and relatives of either, while in a motor vehicle or otherwise, and any person who uses with the consent, expressed or implied, of the named insured, the motor vehicle to which the policy applies and a guest in the motor vehicle to which the policy applies or the personal...