Pinney v. State Farm Mut. Ins. Co.

• Decision Date: 18 September 2001
• Docket Number: No. COA00-1007.,COA00-1007.
• Citation: 146 NC App. 248,552 S.E.2d 186
• Parties: Travis Clay PINNEY, William H. Dick, Plaintiffs, v. STATE FARM MUTUAL INSURANCE COMPANY, Eugene Davis and David Harling, Defendants.
• Court: North Carolina Court of Appeals

552 S.E.2d 186

146 NC App. 248

Travis Clay PINNEY, William H. Dick, Plaintiffs, v. STATE FARM MUTUAL INSURANCE COMPANY, Eugene Davis and David Harling, Defendants.

No. COA00-1007.

Court of Appeals of North Carolina.

September 18, 2001.

Seth M. Bernanke, Charlotte, for plaintiff-appellants.

Young Moore and Henderson, P.A., by R. Michael Strickland and Glenn C. Raynor, Raleigh, for defendant-appellees.

HUNTER, Judge.

Plaintiffs Travis Clay Pinney ("Pinney") and William H. Dick ("Dick") (collectively "plaintiffs") appeal the trial court's order dismissing their complaint for failure to state a claim against defendant State Farm Mutual Automobile Insurance Company ("State Farm"), and its agents, Eugene Davis and David Harling (collectively "defendants"). For the reasons set forth below, we affirm.

Plaintiffs filed a complaint against defendants on 28 January 2000, asserting negligence and/or breach of contract and unfair and deceptive practices. In pertinent part, the complaint alleged the following facts. Dick, Pinney's stepfather, had maintained automobile insurance coverage through defendants continuously since 1980. Dick maintained only the statutory minimum amounts of liability coverage under his automobile policy. In 1991, Dick received a mailing from defendants stating that he was entitled to receive $1,000,000.00 of additional coverage on his automobile policy. The mailing included a rejection form, and indicated that the additional coverage would be added to Dick's policy if he failed to return the rejection form. Dick did not return the rejection form.

On 9 February 1997, Pinney was injured in an automobile accident while a passenger in an automobile driven by Kevin Lee Simmons and owned by Pinney's wife, Teresa Pinney. Both Simmons and Teresa Pinney maintained automobile liability coverage, the limits of which were tendered to Pinney. At the time of the accident, Pinney was residing with his mother and Dick.

The complaint further alleged that it was Dick's "expectation, intent and belief" that the additional $1,000,000.00 of coverage which Dick accepted in 1991 would cover the types of injuries sustained by Pinney. However, the additional coverage, as alleged in the complaint, provided $1,000,000.00 of liability coverage for uninsured motorists ("UM"), and no coverage for underinsured motorists ("UIM"). Plaintiffs alleged that defendants had a fiduciary duty to explain to Dick the extent of the coverage and the difference between UM and UIM coverage. On 27 March 2000, defendants filed a motion to dismiss plaintiffs' complaint for its failure to state a claim for relief under Rule 12(b)(6) of the Rules of Civil Procedure. The trial court heard the motion on 3 May 2000, and entered an order dismissing the complaint on 10 May 2000. Plaintiffs appeal.

On appeal, plaintiffs argue that the trial court erred by (1) failing to convert defendants' motion to dismiss into a motion for summary judgment; (2) failing to consider a cassette tape exhibit submitted by plaintiffs in response to defendants' motion to dismiss; (3) considering defendants' objection to supplemental materials submitted by plaintiffs; (4) granting defendants' motion to dismiss; and (5) failing to grant summary judgment in favor of plaintiffs.

Plaintiffs first argue that the trial court erred in failing to convert defendants' motion to dismiss into a motion for summary judgment. On a motion to dismiss under Rule 12(b)(6), if "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56." N.C. Gen.Stat. § 1A-1, Rule 12(b) (1999); see also, Schnitzlein v. Hardee's Food Sys., Inc., 134 N.C.App. 153, 157, 516 S.E.2d 891, 893,

disc. review denied, 351 N.C. 109, 540 S.E.2d 365 (1999) (motion to dismiss must be converted into motion for summary judgment where matters outside pleadings presented to and considered by court).

In the present case, plaintiffs submitted to the trial court a memorandum of law including documentary and other exhibits in opposition to defendants' 12(b)(6) motion to dismiss. On 3 May 2000, defendants submitted an objection to the trial court's consideration of any materials outside the pleadings. The trial court sustained the objection as to a cassette tape submitted by plaintiffs; however, the order sustaining the objection did not address or mention the additional documents submitted by plaintiffs. Plaintiffs argue that there "is no reasonable interpretation" of the order other than the trial court only excluded the cassette tape and considered the additional documents, requiring conversion to a motion for summary judgment.

Although the order sustaining defendants' objection to consideration of the cassette tape is ambiguous as to the additional documents, the trial court's order dismissing the complaint is not ambiguous. That order clearly states that in considering defendants' motion to dismiss, the trial court considered only "the allegations of the Complaint" and "the arguments of counsel." Moreover, in its order settling the record on appeal, the trial court clearly stated that "none of the [additional] documents and cassette tape were considered by the Court in its order of dismissal dated May 8, 2000."

In Privette v. University of North Carolina, 96 N.C.App. 124, 132, 385 S.E.2d 185, 189 (1989), this Court held that the trial court was not required to convert a motion to dismiss into one for summary judgment simply because additional documents were submitted:

While matters outside the pleadings were introduced, the record is clear the trial court did not consider these affidavits in ruling on the Rule 12 motion. The trial court specifically stated in its order that for the purposes of the Rule 12 motion, it considered only the amended complaint, memoranda submitted on behalf of the parties and arguments of counsel.

Id. The record is equally clear in the present case that the trial court did not consider plaintiffs' additional documents. The trial court was not required to convert defendants' motion into one for summary judgment. We therefore need not address whether the trial court erred in failing to consider the cassette tape submitted by plaintiffs.

Plaintiffs further argue that the trial court erred in considering defendants' objection to plaintiffs' submission of supplemental materials because the motion was "untimely filed" under Local Rule 11.7 ("[a]ll briefs and supporting cases, or any other materials intended to be used in argument or submitted to the Court, are to be delivered ... for filing forty-eight hours prior to the hearing on the motion"). Even if defendants' objection fell within the scope of Rule 11.7, the trial court has wide discretion in the application of local rules. See Young v. Young, 133 N.C.App. 332, 333, 515 S.E.2d 478, 479 (1999) (quoting Lomax v. Shaw, 101 N.C.App. 560, 563, 400 S.E.2d 97, 98 (1991)). Plaintiffs have failed to show that the trial court abused its discretion in considering defendants' motion. These assignments of error are overruled.

Plaintiffs next argue that the trial court erred in granting defendants' motion to dismiss the complaint for failure to state a claim upon which relief may be granted. Plaintiffs argue that the complaint establishes that Dick was entitled to UIM coverage, and in the alternative, that defendants breached a duty in failing to inform Dick that he did not have UIM coverage. We disagree.

"In reviewing the grant of a 12(b)(6) motion to dismiss, we assess the legal sufficiency of the complaint, taking all factual allegations as true." Lane v. City of Kinston, 142 N.C.App. 622, 624, 544 S.E.2d 810, 813 (2001) (citing Peacock v. Shinn, 139 N.C.App. 487, 491, 533 S.E.2d 842, 846, disc. review denied, 353 N.C. 267, 546 S.E.2d 110 (2000)). "`A complaint cannot withstand a motion to dismiss where an insurmountable bar to recovery appears on its face.'" Id. (citation omitted). An insurmountable bar to recovery may include the absence of law to support a claim, the absence of facts sufficient to state a good claim, or the disclosure of some fact that necessarily defeats a claim. Al Hourani v. Ashley, 126 N.C.App. 519, 521, 485 S.E.2d 887, 889 (1997).

Issues of UIM coverage are governed by N.C. Gen.Stat. § 20-279.21(b)(4). This statute provides that automobile liability insurance policies "[s]hall ... provide underinsured motorist coverage, to be used only with a policy that is written at limits that exceed those prescribed by subdivision (2) of this section." N.C. Gen.Stat. § 20-279.21(b)(4) (1999). Subdivision 2 of the section sets forth the statutory minimum limits for an automobile insurance policy. The plain language of this statute has been interpreted to require a policyholder to maintain liability coverage that is above the statutory minimum in order to be eligible for UIM coverage. See Morgan v. State Farm Mut. Auto. Ins. Co., 129 N.C.App. 200, 204, 497 S.E.2d 834, 836,

affirmed,

349 N.C. 288, 507 S.E.2d 38 (1998) ("pursuant to subdivision (b)(4), UIM coverage may be obtained only if the policyholder has liability insurance in excess of the minimum statutory requirement").

In Morgan, we held that there existed no genuine issue of material fact as to whether plaintiff had UIM coverage under a State Farm policy at the time of the accident "since the policy in question only provided the minimum statutory-required coverage" and thus "the policy was not required to provide UIM coverage under section 20-279.21(b)(4)." Morgan, 129 N.C.App. at 205, 497 S.E.2d at 837. This Court recently reaffirmed this principle in McNally v. Allstate Ins. Co., 142 N.C.App. 680, 544 S.E.2d 807 (2001). We held that "Section 20-279.21(b)(4) clearly states UIM coverage is to be provided to policies with limits exceeding the minimum limits unless rejected." Id. at 682, 544 S.E.2d at 809. Since the plaintiff in McNally did not purchase a...