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

• Decision Date: 28 January 1994
• Docket Number: No. 317A92,317A92
• Parties: George L. PROCTOR, Administrator of the Estate of Joyce Batts Proctor v. NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY and Bobby F. Jones, Administrator of C.T.A. of the Estate of William Gray Edwards, Jr.
• Court: North Carolina Supreme Court

Page 112

439 S.E.2d 112

335 N.C. 533

George L. PROCTOR, Administrator of the Estate of Joyce Batts Proctor v. NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY and Bobby F. Jones, Administrator of C.T.A. of the Estate of William Gray Edwards, Jr.

No. 317A92.

Supreme Court of North Carolina.

Jan. 28, 1994.

Appeal by defendant North Carolina Farm Bureau Mutual Insurance Company pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of the Court of Appeals, 107 N.C.App. 26, 418 S.E.2d 680 (1992), affirming a judgment entered 17 May 1991 by Strickland, J., in Superior Court, Edgecombe County. Heard in the Supreme Court 14 September 1993.

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

Nichols, Caffrey, Hill, Evans & Murrelle by Paul D. Coates & ToNola D. Brown, Greensboro, for defendant-appellant.

FRYE, Justice.

In this appeal based solely on the dissenting opinion in the Court of Appeals, North Carolina Farm Bureau Mutual Insurance Company [hereinafter Farm Bureau] contends that the Court of Appeals erred (1) in determining that plaintiff is entitled to stack the underinsured motorist [hereinafter UIM] coverage in the policy issued to the named plaintiff (the Proctor policy) with the UIM coverage in the policy issued to Country Manor Antiques (interpolicy stacking); and, (2) in determining that plaintiff is entitled to stack the UIM coverages on the three vehicles insured in the Proctor policy (intrapolicy stacking). ¹

Justice Parker recused and took no part in the consideration or decision of this case. The remaining members of the Court are equally divided with three members voting to affirm the decision of the Court of Appeals as to interpolicy stacking and three members voting to reverse. Accordingly, that portion of the decision of the Court of Appeals which affirmed the trial court as to interpolicy stacking is left undisturbed and stands without precedential value. See Nesbit v. Howard, 333 N.C. 782, 429 S.E.2d 730 (1993).

For the reasons stated hereinafter, we conclude that the Court of Appeals erred as to the issue of intrapolicy stacking. Accordingly, we must reverse that portion of the Court of Appeals' decision.

The circumstances giving rise to this case are as follows: Plaintiff's wife, Joyce Batts Proctor, was killed in a traffic accident on 27 September 1984 while driving a van owned by Country Manor Antiques [hereinafter Country Manor], a partnership in which she was a partner. Mrs. Proctor's death was caused by the negligence of William Gray Edwards, Jr., who was driving the other vehicle involved in the accident. Edwards also died as a result of the accident. His vehicle was covered by a liability insurance policy issued by State Farm Mutual Insurance Company [hereinafter State Farm] which provided maximum liability coverage limits of $25,000 per person and $50,000 per accident. State Farm paid one-third of its $50,000 per accident limit to plaintiff and the remaining amount was paid to other injured parties. In addition, the Edwards estate paid plaintiff one-third of its $10,000 of available assets.

Plaintiff's wife was covered by two automobile insurance policies, both of which were issued by defendant Farm Bureau. One was a business policy issued to Country Manor which provided liability insurance at limits for wrongful death of $100,000 per person and $300,000 per accident, as well as uninsured motorist coverage [hereinafter UM]. The other policy was a personal policy issued to George L. Proctor. The Proctor policy listed Joyce Proctor as an insured driver and provided coverage for three vehicles belonging to the Proctors. For each of plaintiff's three vehicles, the Proctor policy provided liability insurance at limits of $100,000 per person and $300,000 per accident as well as UM coverage. Both the Country Manor policy and the Proctor policy recited that UIM coverage would not be provided unless the insured specifically requested it. However, this provision of both policies was contrary to N.C.G.S. § 20-279.21(b)(4) which required that UIM coverage be provided unless it was specifically rejected. Neither plaintiff, plaintiff's decedent, nor Country Manor rejected UIM coverage; therefore, Farm Bureau conceded that UIM coverage was provided in both policies pursuant to subdivision (b)(4).

The parties disagreed as to the appropriate amount of UIM coverage; consequently, plaintiff filed an action on 18 September 1986 asserting 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 amount of UIM coverage 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 issue before the court was whether the UIM coverage limit was the minimum UIM coverage offered by the insurer ($50,000) or the $100,000 per person limit for liability insurance contained in the Country Manor policy. The trial court granted summary judgment for plaintiff holding that the UIM coverage was equal to the $100,000 per person limit for liability insurance contained in the policy. Farm Bureau appealed to the Court of Appeals which affirmed the trial court by a divided panel. Proctor v. N.C. Farm Bureau Mutual Ins. Co., 90 N.C.App. 746, 370 S.E.2d 258 (1988). This Court affirmed, with Justice Meyer dissenting. Proctor v. N.C. Farm Bureau Mutual Ins. Co. [hereinafter Proctor I ], 324 N.C. 221, 376 S.E.2d 761 (1989).

After our decision in Proctor I was certified to the trial court, plaintiff filed a motion for partial summary judgment in which he contended he was permitted to stack the UIM coverages for the three vehicles listed in the Proctor policy for a total of $300,000 UIM coverage under that policy. Farm Bureau filed a cross-motion for partial summary judgment, contending that plaintiff could not engage in either interpolicy stacking or intrapolicy stacking of UIM coverages. 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, thus providing an additional $300,000 in total UIM coverage. The Court of Appeals affirmed by a divided panel. Proctor v. N.C. Farm Bureau Mutual Ins. Co., 107 N.C.App. 26, 418 S.E.2d 680 (1992). On the issue of intrapolicy stacking, we now reverse.

Both parties acknowledge that the 1983 version of N.C.G.S. § 20-279.21(b)(4) of the Motor Vehicle Safety and Financial Responsibility Act of 1953 is applicable to this issue. Subdivision (b)(4) as written at the time of the accident was silent on the issue of intrapolicy stacking of UIM coverages.

When deciding this issue, the Court of Appeals did not have the benefit of this Court's decision in Lanning v. Allstate Ins. Co., 332...