Proctor v. North Carolina Farm Bureau Mut. Ins. Co.

Decision Date21 July 1992
Docket NumberNo. 917SC714,917SC714
Citation418 S.E.2d 680,107 N.C.App. 26
PartiesGeorge L. PROCTOR, Administrator of the Estate of Joyce Batts Proctor, Plaintiff, v. NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY and Bobby F. Jones, Administrator C.T.A. of the Estate of William Gray Edwards, Jr., Defendants.
CourtNorth Carolina Court of Appeals

Bridgers, Horton & Rountree by Charles S. Rountree, Tarboro, for plaintiff-appellee.

Poyner & Spruill by George L. Simpson III, Rocky Mount, for North Carolina Farm Bureau Mut. Ins. Co., defendant-appellant.

COZORT, Judge.

Defendant North Carolina Farm Bureau Mutual Insurance Company ("Farm Bureau") appeals from the trial court's entry of summary judgment for plaintiff which determined plaintiff was entitled to engage in both interpolicy and intrapolicy stacking of underinsured motorist ("UIM") coverage. Defendant argues the trial court improperly ordered stacking of the policies in the present case because the accident in question occurred prior to an amendment to N.C.Gen.Stat. § 20-279.21(b)(4) which now imposes an insurance stacking requirement. We disagree with defendant's contentions and thus affirm.

The facts of the case below are undisputed. The plaintiff's wife, Joyce Batts Proctor, was killed in an automobile accident on 27 September 1984 when another vehicle struck her automobile in her lane of travel. The driver of the other automobile, William Gray Edwards, Jr., also died as a result of the accident. Plaintiff's decedent was driving a van owned by Country Manor Antiques ("Country Manor"), a business partnership of which she was a partner. The wrongful death of Mrs. Proctor was caused by the negligence of Mr. Edwards. Edwards held an automobile liability insurance policy issued by State Farm Mutual Insurance Company ("State Farm") which provided liability coverage maximum limits for bodily injury or wrongful death of $25,000 per person and $50,000 per accident. State Farm paid one-third of its $50,000 limit to plaintiff and the remaining amount was paid to other injured parties. In addition, the Edwards estate paid plaintiff one-third of $10,000 to plaintiff. The payments exhausted all liability insurance proceeds and all assets of the Edwards estate available to satisfy any judgment that plaintiff could obtain for his wife's death.

The plaintiff's decedent was covered by two automobile insurance policies; both were issued by defendant Farm Bureau. One policy was a business policy issued to Country Manor. The Country Manor policy had maximum liability coverage limits for bodily injury or wrongful death of $100,000 per person and $300,000 per accident. The other policy was a personal policy held by plaintiff, George L. Proctor. The Proctor policy listed Joyce Proctor as a family member and insured three vehicles belonging to the Proctors. Both the Country Manor policy and the Proctor policy recited that UIM coverage would not be provided unless the insured specifically requested it. However, neither plaintiff, plaintiff's decedent, nor Country Manor rejected UIM coverage. Defendant therefore conceded that UIM coverage was provided in both policies pursuant to N.C.Gen.Stat. § 20-279.21(b)(4), despite the fact that premiums had never been paid for such coverage.

The parties disagreed as to the appropriate amount of UIM coverage; consequently, plaintiff filed an action on 18 September 1986 with a claim against Farm Bureau pursuant to both the Country Manor and Proctor policies. The parties treated the claim as a declaratory judgment action to determine the coverage question and filed cross-motions for summary judgment. The motions at that point dealt solely with the Country Manor policy and made no mention of the Proctor policy. The trial court granted summary judgment for plaintiff and ordered Farm Bureau to pay plaintiff the sum of $75,000 (representing the $100,000 UIM limit, minus a credit for State Farm's $25,000 liability limit). Defendant Farm Bureau appealed; the trial court was affirmed in Proctor v. North Carolina Farm Bureau Mut. Ins. Co., 90 N.C.App. 746, 370 S.E.2d 258 (1988) and in 324 N.C. 221, 376 S.E.2d 761 (1989).

Subsequent to the Proctor decision, plaintiff filed a motion for partial summary judgment in which he contended he was now permitted to stack the coverage for the three vehicles covered in the Proctor policy for an additional $300,000 in UIM coverage. Farm Bureau filed a cross-motion for partial summary judgment, contending that plaintiff could not engage in either interpolicy or intrapolicy stacking of UIM coverage. For purposes of the motion hearing only, the parties stipulated that the damages to the estate of Mrs. Proctor exceeded $400,000. The trial court granted plaintiff's motion and denied Farm Bureau's motion, holding that plaintiff was entitled to stack the coverage from the Proctor policy in both an interpolicy and intrapolicy manner providing an additional $300,000 in coverage. Defendant Farm Bureau filed timely notice of appeal. We affirm.

The first issue we must decide is whether the trial court erred in permitting plaintiff to engage in interpolicy stacking by stacking the coverage from the Proctor policy onto the coverage of the Country Manor policy. Farm Bureau contends that because the accident giving rise to the claim occurred prior to the enactment of the 1985 amendment to N.C.Gen.Stat. § 20-279.21(b)(4), which added an interpolicy stacking requirement, the insurance policy controls. At the time of the accident, the statute in effect provided:

[Automobile liability insurance policies] shall ... provide underinsured motorist coverage, to be used only with policies that are written at limits that exceed those prescribed by subdivision (2) of this section and that afford uninsured motorist coverage as provided by subdivision (3) of this subsection, but not to exceed the policy limits for automobile bodily injury liability as specified in the owner's policy.

N.C.Gen.Stat. § 20-279.21(b)(4) (1983). The Proctor policy included a provision relating to uninsured motorist ("UM") coverage which stated, "If this policy and any other auto insurance policy issued to you apply to the same accident, the maximum limit of liability for your injuries under all the policies shall not exceed the highest applicable limit of liability under any one policy." Farm Bureau contends this limitation applies to both UM and UIM coverage. However, we need not decide whether this qualifier applies to Joyce Proctor because the statute even prior to the 1985 amendment permits interpolicy stacking. In Sproles v. Greene, 100 N.C.App. 96, 394 S.E.2d 691 (1990), aff'd in part, rev'd in part on other grounds, 329 N.C. 603, 407 S.E.2d 497 (1991), we addressed the identical issue with respect to interpolicy stacking. The accident leading to the claims in Sproles occurred in 1984, prior to the 1985 revision of N.C.Gen.Stat. § 20-279.21(b)(4). The plaintiff in Sproles was an insured under two different policies providing UIM coverage. One of the policies was issued by Travelers Indemnity Insurance Company ("Travelers"), and the other was issued by United States Fidelity and Guaranty Company ("USF & G"). The USF & G policy included a provision identical to that in the case at bar which limited the amount of coverage to the maximum of only one applicable policy. This Court, striking USF & G's contention that plaintiff's recovery was limited, explained:

This policy provision conflicts with G.S. 20-279.21(b)(4) and is therefore unenforceable. In addition to making the underinsured motorist coverage limits in an automobile policy the same as the liability limits, unless the policyholder rejects the coverage, Proctor v. North Carolina Farm Bureau Mutual Insurance Company, 324 N.C. 221, 376 S.E.2d 761 (1989), G.S. 20-279.21(b)(4) requires that multiple underinsured motorist coverage available to an innocently injured accident victim be stacked or aggregated. Sutton v. Aetna Casualty & Surety Co., 325 N.C. 259, 382 S.E.2d 759, reh'g denied, 325 N.C. 437, 384 S.E.2d 546 (1989). This statutory mandate would availnothing if insurance carriers could limit an injured insured's recovery to the maximum amount due under one policy.

Sproles, 100 N.C.App. at 108, 394 S.E.2d at 698. Farm Bureau alleges this Court in Sproles inadvertently "overlooked the fact that the accident in question occurred in 1984, before the 1985 revision was enacted," since "the court's reference to a 'statutory mandate' for stacking ... make[s] no sense." We find that Sproles served to recognize only what Sutton v. Aetna Casualty & Surety Co., 325 N.C. 259, 382 S.E.2d 759, reh'g denied, 325 N.C. 437, 384 S.E.2d 546 (1989), voiced explicitly, that interpolicy stacking pursuant to N.C.Gen.Stat. § 20-279.21(b)(4) was contemplated prior to 1985, and was only clarified by the later amendment. See, Proctor, 324 N.C. at 224-25, 376 S.E.2d at 763-64. Our interpretation of the statute at the time of the accident "provide[s] the innocent victim with the fullest possible protection." Id. at 225, 376 S.E.2d at 764. For these reasons, we find the trial court did not err in allowing the interpolicy stacking between the Country Manor policy and the Proctor policy.

We note the amount of coverage provided by the Proctor policy is dictated by the Proctor case, which determined the Country Manor policy had UIM coverage equal to the liability policy covering the victim. See also, Sproles, 100 N.C.App. at 101, 394 S.E.2d at 694. As with the Country Manor policy, the plaintiff's decedent was a named insured and UIM coverage was not rejected. The maximum liability coverage for wrongful death was $100,000 per person and $300,000 per vehicle. The amount of UIM coverage with respect to the Proctor policy therefore equalled $100,000 as to Joyce Proctor.

The above determination leads us to the second issue, whether the trial court erred in allowing plaintiff to stack coverage of three vehicles on an...

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