Summary
In Bass v. N.C. Farm Bureau Mut. Ins. Co., 332 N.C. 109, 418 S.E.2d 221 (1992), the plaintiff was also injured while riding his motorcycle.
Summary of this case from Honeycutt v. WalkerOpinion
No. 12PA91
(Filed 17 July 1992)
Insurance 528 (NCI4th) — injury in vehicle without UIM coverage — UIM coverage under policy on other vehicles Underinsured motorist (UIM) coverage is available under an automobile/truck policy issued to a named insured when a motorcycle owned by the named insured and involved in his injuries is insured under a separate policy not containing UIM coverage, since plaintiff is a "person insured" of the first class set forth in N.C.G.S. 20-279.21(b)(3) under the UIM provisions of the automobile/truck policy.
Am Jur 2d, Automobile Insurance 322.
ON discretionary review of a decision of the Court of Appeals, 103 N.C. App. 272, 405 S.E.2d 370 (1991), reversing the entry of summary judgment for the defendant by Butterfield, J., at the 15 December 1989 Session of Superior Court, WILSON County. Heard in the Supreme Court 9 March 1992.
Connor, Bunn, Rogerson Woodard, P.A., by James F. Rogerson; and Thomas Farris, P.A., by Allen G. Thomas and Julie Turner, for plaintiff-appellee.
Nichols, Caffrey, Hill, Evans Murrelle, by Paul D. Coates and ToNola D. Brown, for defendant-appellant.
Justice MEYER dissenting.
The sole issue presented on appeal is whether the Court of Appeals erred in holding that underinsured motorist (UIM) coverage is available under a policy issued to a named insured, when the vehicle owned by the named insured and involved in his injuries is insured under a separate policy not containing UIM coverage. We hold that the Court of Appeals did not err.
Plaintiff was permanently injured when his 1986 Honda motorcycle was struck by an automobile driven by Manuel Tyson. Plaintiff insured the Honda motorcycle with State Farm Mutual Automobile Insurance Company. No UIM coverage was provided in this policy. Plaintiff also owned a 1979 Dodge truck and a 1981 Ford automobile, both of which were insured under a policy issued by defendant with $100,000/$300,000 UIM coverage.
In a tort action against Tyson, plaintiff obtained a jury verdict of $900,000, and Tyson's insurance carrier paid the plaintiff $25,000, exhausting its liability limits. Plaintiff then turned to defendant, requesting payment under the UIM provisions of his automobile/truck policy. Following defendant's failure to honor his request, plaintiff commenced this action against defendant.
The trial court granted defendant's motion for summary judgment, and the Court of Appeals affirmed. Bass v. North Carolina Farm Bureau Mut. Ins. Co., 100 N.C. App. 728, 398 S.E.2d 47 (1990). This Court granted plaintiff's petition for discretionary review for the limited purpose of remanding the case for reconsideration in light of our decision in Smith v. Nationwide Mut. Ins. Co., 328 N.C. 139, 400 S.E.2d 44, reh'g denied, 328 N.C. 577, 403 S.E.2d 514 (1991). Bass v. North Carolina Farm Bureau Mut. Ins. Co., 328 N.C. 328, 402 S.E.2d 829 (1991). On remand, the Court of Appeals reversed the trial court's grant of summary judgment. Bass v. North Carolina Farm Bureau Mut. Ins. Co., 103 N.C. App. 272, 405 S.E.2d 370 (1991). We allowed defendant's petition for discretionary review. Bass v. North Carolina Farm Bureau Mut. Ins. Co., 330 N.C. 193, 412 S.E.2d 52 (1991).
Defendant contends that the Court of Appeals erred by reversing the trial court's grant of its motion for summary judgment. In support of this contention, defendant argues that Smith is distinguishable from the instant case in that "Smith is limited to its facts so that an insured injured while riding in an owned vehicle not included in a policy insuring other vehicles, can recover UIM benefits from that policy only if the owned vehicle is covered by a policy which also contains UIM coverage." Defendant reads Smith too narrowly.
In Smith, the plaintiff's intestate was fatally injured while riding in an automobile which she owned with her father and which was insured with UIM coverage in the amount of $100,000 per person. Smith, 328 N.C. at 141, 100 S.E.2d at 46. The plaintiff's intestate lived in the same household with her father who owned and insured two automobiles on a separate policy with UIM coverage also in the amount of $100,000 per person for each vehicle. Id. The father's policy covered both of his automobiles, neither of which was owned by the plaintiff's intestate. Id. The question before the Court was whether the plaintiff's intestate was covered for UIM benefits under her own UIM coverage and under the UIM coverage in her father's policy. We held in Smith that the plaintiff was entitled to recover under the UIM provisions of both policies, notwithstanding the fact that his daughter's vehicle was not insured under his policy. Id. at 150-51, 400 S.E.2d at 51-52.
While both insurance policies in Smith contained UIM coverage, this Court's decision did not rest on that fact. Instead, the critical factor in Smith was that the plaintiff's intestate was a "person insured" of the first class under the provisions of N.C.G.S. 20-279.21(b)(3). Persons insured of the first class include "the named insured and, while resident of the same household, the spouse of any named insured and relatives of either . . . ." Crowder v. North Carolina Farm Bureau Mut. Ins. Co., 79 N.C. App. 551, 554, 340 S.E.2d 127, 129 (quoting N.C.G.S. 20-279.21(b)(3)), disc. rev. denied, 316 N.C. 731, 345 S.E.2d 387 (1986). As a "person insured" of the first class under her father's policy, the decedent in Smith was covered for UIM benefits regardless of whether the vehicle she was riding in was insured under her father's policy or a separate policy. See Crowder, 79 N.C. App. at 554, 340 S.E.2d at 129 (persons insured of the first class entitled to recover "even where the insured vehicle is not involved in the insured's injuries"). As we made clear in Smith, "liability insurance is essentially vehicle oriented, while UM/UIM insurance is essentially person oriented." Smith, 328 N.C. at 148, 400 S.E.2d at 50.
N.C.G.S. 20-279.21 was amended by the General Assembly in 1991. 1991 N.C. Sess. Laws ch. 646, 1-4. However, the amendments do not affect claims arising or litigation pending prior to the amendments. Id. at 4. Unless otherwise noted, any citation to or discussion of N.C.G.S. 20-279.21 will be with respect to that version of the statute in effect at the time of the accident.
Turning to the present case, the question becomes whether plaintiff is a "person insured" of the first class under the UIM provisions of his automobile/truck policy with defendant. It is undisputed that plaintiff is the named insured under the policy with defendant. Therefore, plaintiff is a "person insured" of the first class under the UIM provisions of the automobile/truck policy issued to plaintiff by defendant. Smith, 328 N.C. at 143, 400 S.E.2d at 47. The fact that plaintiff's motorcycle policy did not provide UIM coverage is of no significance to this decision, because plaintiff is not seeking any recovery under his motorcycle policy. As a person insured of the first class, plaintiff is entitled to UIM benefits under his automobile/truck policy regardless of whether he is riding in the insured vehicles or on his motorcycle, or just walking down the street. Id. We therefore hold that plaintiff may recover under the UIM provision of the automobile/truck policy issued by defendant.
While we agree with the decision of the Court of Appeals, we find it necessary to correct some misleading statements in its opinion. For example, at the beginning of the opinion, the court stated, "Following Smith, we find the underinsured motorist coverages provided in plaintiff's automobile insurance policies are stackable." Bass v. North Carolina Farm Bureau Mut. Ins. Co., 103 N.C. App. 272, 273, 405 S.E.2d 370, 371 (emphasis added). Again at the end of the opinion, the court stated, "Thus under the language of the policy, the UIM provision of the policy issued by defendant may be stacked with the UIM coverage in policy 2." Id. at 275, 405 S.E.2d at 372 (emphasis added). Only one policy issued by defendant is involved in this case, the policy issued to plaintiff insuring the Dodge truck and Ford automobile. The motorcycle policy issued by another carrier, designated as "policy 2" by the Court of Appeals, did not provide UIM coverage. It is impossible to stack the UIM coverage under the automobile/truck policy with coverage under the motorcycle policy, since the policy on the motorcycle contains no UIM coverage. Thus, the stacking involved in the instant case is intrapolicy rather than interpolicy. We thus disapprove any statements in the Court of Appeals opinion suggesting that this case involves interpolicy stacking.
The 1991 amendment to N.C.G.S. 20-279.21(b)(4) appears to prohibit intrapolicy stacking. 1991 N.C. Sess. Laws ch. 646, 2. However, because this action accrued prior to the effective date of the amendment, it is not affected by the amendment. Id. at 4.
For the reasons stated herein, the decision of the Court of Appeals is affirmed.
Affirmed.