Nationwide Mut. Ins. Co. v. Integon Nat'l Ins. Co.
| Decision Date | 21 January 2014 |
| Docket Number | No. COA13–640.,COA13–640. |
| Citation | 753 S.E.2d 388 |
| Court | North Carolina Court of Appeals |
| Parties | NATIONWIDE MUTUAL INSURANCE COMPANY, INC., Plaintiff, v. INTEGON NATIONAL INSURANCE COMPANY and State National Insurance Company, Defendants. |
OPINION TEXT STARTS HERE
Appeal by plaintiff from order entered 27 March 2013 by Judge Carl R. Fox in Wake County Superior Court. Heard in the Court of Appeals 23 October 2013.
Cranfill Sumner & Hartzog, LLP, Raleigh, by George L. Simpson, IV, for plaintiff-appellant.
Bennett & Guthrie, PLLC, Winston–Salem, by Rodney A. Guthrie, for defendant-appellee Integon National Insurance Company.
Pinto Coates Kyre & Bowers, PLLC, Greensboro, by Deborah J. Bowers, for defendant-appellee State National Insurance Company.
Plaintiff Nationwide Mutual Insurance Company (“Plaintiff”) appeals from a 27 March 2013 order granting summary judgment in favor of Integon National Insurance Company (“Integon”) and State National Insurance Company (“State National”).1 Upon review, we find the trial court erred by not applying a pro rata distribution of the credit paid by the underinsured motorist's insurance provider to all three underinsured motorist insurance (“UIM”) policy providers. We reach this conclusion because the respective excess clauses were (i) mutually repugnant and (ii) because the claimant was a Class I insured under all three UIM policies. Under North Carolina Farm Bureau v. Bost, 126 N.C.App. 42, 483 S.E.2d 452 (1997), the trial court was required to allocate credits and liabilities amongst the three UIM policyholders on a pro rata basis if both of these conditions are met. We thus reverse the trial court and remand for the trial court to enter summary judgment for Plaintiff.
This declaratory judgment action arose out of an insurance coverage question allocating proceeds of three separate UIM policies to pay a wrongful death claim. Plaintiff filed its original complaint for declaratory judgment on 8 June 2012, which was amended by consent on 7 December 2012.2 Integon and State National timely answered Plaintiff's complaint on 10 January 2013 and 17 January 2013 respectively. All parties moved for summary judgment. The summary judgment motions were heard by Judge Carl R. Fox in Wake County Superior Court on 7 March 2013. Judge Fox denied Plaintiff's motion for summary judgment and allowed Defendants' motions on 27 March 2013. Plaintiff filed a timely written notice of appeal on 18 April 2013. Plaintiff and Defendants stipulated to the following facts.
A three-vehicle accident occurred on 23 August 2011, involving the decedent Nelson Lee Clark (“Clark”), the tortfeasor Gaye Holman Ikerd (“Ikerd”), and Lucille Pitts (“Pitts”). Ikerd ran a red light and collided with Clark's motorcycle. Pitts was driving a separate vehicle that ran over Clark after he was thrown from his motorcycle. Ikerd admitted liability to Clark's estate, and her liability insurer paid the policy limit of $50,000. Pitts was not found liable for the incident.
Clark was insured for UIM coverage under three policies: (1) the Integon policy, number NCV 9474162, issued to Nelson Clark as the named insured and covering the motorcycle that Clark was driving at the time of the accident in the amount of $100,000 per person; (2) the State National policy, number 47 NCQD 118505586, issued to Nelson Clark as the named insured in the amount of $50,000 per person; and (3) a policy issued by Plaintiff, number 6132 019939, to Walter Lee and Nancy Ikard Clark as named insureds in the amount of $50,000 per person. Mr. and Mrs. Clark were the decedent's parents, and he was a resident of their household at the time of the accident. The parties stipulated to the following relevant policy provisions:
Nationwide Policy:
Policyholder—Named Insured: Walter Lee and Nancy Ikard Clark
UM/UIM limits: $50,000 per person/$100,000 per accident
If this policy and any other auto insurance policy apply to the same accident, the maximum amount payable under all applicable policies for all injuries to an insured caused by an uninsured motor vehicle or underinsured motor vehicle shall be the sum of the highest limit of liability for this coverage under each policy.
In addition, if there is other applicable similar 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 with respect to a vehicle you do not own shall be excess over any other collectible insurance.
Integon policy 3:
Policyholder—Named Insured: Nelson Clark
UM/UIM limits: $100,000 per person/$300,000 per accident
If this policy and any other auto insurance policy issued to you apply to the same accident, the maximum amount payable under all applicable policies for all injuries caused by an uninsured motor vehicle under all policies shall not exceed the highest applicable limit of liability under any one policy.
If this policy and any other auto insurance policy issued to you apply to the same accident, the maximum amount payable for injuries to you or a family member caused by an underinsured motor vehicle shall be the sum of the highest limit of liability for this coverage under each such policy.
In addition, if there is other applicable similar insurance, we will pay only our share of the loss. Our loss is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide with respect to a vehicle you do not own shall be excess over any other collectible insurance.
State National policy:
Policyholder—Named Insured: Nelson Clark
UM/UIM limits: $50,000 per person/$100,000 per accident
If this policy and any other auto insurance policy apply to the same accident, the maximum amount payable under all applicable policies for all injuries to an insured caused by an uninsured motor vehicle or underinsured motor vehicle shall be the sum of the highest limit of liability for this coverage under each policy.
In addition, if there is other applicable similar 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 with respect to a vehicle you do not own shall be excess over any other collectible insurance.
All three policies define the term “you” as:
Throughout this policy, “you” and “your” refer to:
1. The “named insured” shown in the Declarations; and
2. The spouse if a resident of the same household.
After reviewing the policies, the pleadings, the parties' motions, the parties' memoranda, and hearing the parties' arguments, Judge Carl Fox granted summary judgment on behalf of Defendants based on Defendants' contention that their policies should be considered primary and Plaintiff's policy should be considered excess. The trial court concluded “as a matter of law that there is no genuine issue of any material fact in this case that the underinsured motorist coverage afforded ... on those same claims is excess[.]”
On appeal, Plaintiff asks this Court to reverse the trial court based upon this Court's holding in Bost.126 N.C.App. at 52, 483 S.E.2d at 458–59.
This Court has jurisdiction to review the matter pursuant to N.C. Gen.Stat. § 7A–27(b) (2013). “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 as to any material fact and that any party is entitled to a judgment as a matter of law.’ ” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (quoting Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)). “ ‘Under a de novo review, the court considers the matter anew and freely substitutes its own judgment’ for that of the lower tribunal.” State v. Williams, 362 N.C. 628, 632–33, 669 S.E.2d 290, 294 (2008) (quoting In re Greens of Pine Glen Ltd. P'ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003)).
Plaintiff argues that the holding in Bost requires a pro rata distribution of the $50,000 credit supplied by the underinsured motorist Ikerd's insurer. Plaintiff argues that Bost requires pro rata distribution because (i) the three policies' “other insurance” sections are mutually repugnant and (ii) claimant Clark was a Class I insured under the three policies, which requires pro rata distribution under Bost. Defendants argue that the language used in the UIM policies controls and class designation is not relevant when multiple UIM excess clauses may be read together harmoniously. See Iodice v. Jones, 133 N.C.App. 76, 79 & n. 3, 514 S.E.2d 291, 293 & n. 3 (1999).
For purposes of clarity, we hold that courts resolving UIM credit/liability apportionment disputes amongst multiple providers must make the following inquiry in deciding these cases. First the language used in the excess clause must be identical between the excess clauses of the respective UIM policies, or “mutually repugnant.” See Sitzman v. Gov't Employees Ins. Co., 182 N.C.App. 259, 262–64, 641 S.E.2d 838, 840–42 (2007) (). If the language is not identical, the inquiry ends, as the excess policies are not mutually repugnant, and the trial court may apply the facial policy language to determine distribution. Id.
If this first prong is satisfied and the policies are repugnant, the second inquiry is to determine whether the respective UIM carriers are in the same class; if so, the trial court must apportion liabilities and credits on a pro rata basis. Bost, 126 N.C.App. at 52, 483 S.E.2d at 458–59.
Only after considering the “class” of the claimant do we reach the third step of the inquiry. If separate classes exist, a...
To continue reading
Request your trial
- State v. Smathers
- State v. Adams
-
Branch Banking & Trust Co. v. SunTrust Bank
...as to any material fact and that any party is entitled to a judgment as a matter of law.’ " Nationwide Mut. Ins. Co. v. Integon Nat. Ins. Co. , 232 N.C. App. 44, 48, 753 S.E.2d 388, 391 (2014) (quoting In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) ). ¶ 29 Plaintiff does......
- State v. Brown, COA18-1107