Appeal by plaintiff from judgment entered 22 February 1999 by
Judge Wiley F. Bowen in Orange County Superior Court. Heard in the
Court of Appeals 26 April 2000.
Edgar & Paul, by Patrick M. Anders, for plaintiff-appellant.
Cranfill, Sumner & Hartzog, L.L.P., by Leigh Ann Smith, for
defendants-appellees.
WALKER, Judge.
On 30 December 1997, plaintiff USAA Casualty Insurance Company
(“USAA”) filed this declaratory judgment action against defendant
Universal Underwriters Insurance Company (“Universal”) to determine
the responsibilities of the two insurers based on a claim arising
out of an underlying vehicle accident.
On 22 November 1995, USAA's insured, Burke S. Lewis, was
operating a vehicle owned by Universal's insured, Ragsdale Motor
Company, Inc., an automobile dealership. Lewis was driving with
the permission of Michael R. Ragsdale, Jr. (“Ragsdale”), who was
also in the vehicle and is the son of Ragsdale Motor Company's
president. Ragsdale had been given the permanent use of thevehicle by his father.
The vehicle Lewis was driving struck another vehicle driven by
William B. Roberts, who brought suit against Lewis, Ragsdale, and
Ragsdale Motor Company. A dispute arose between USAA and Universal
as to the priorities of coverage between their policies. USAA and
Universal settled with Roberts for $10,500, with payment contingent
upon the outcome of the declaratory judgment.
USAA's liability policy contains an “other insurance” clause
which provides:
If there is other applicable liability
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 temporary substitute
vehicle or non-owned auto shall be excess over
any other valid and collectible insurance.
USAA's policy limits were $300,000 per person injured.
Under Universal's liability policy, Part (4) of WHO IS AN
INSURED states that an insured is:
any other person or organization required by
law to be an INSURED while using an AUTO
covered by this Coverage Part within the scope
of YOUR permission.
Additionally, COVERAGE PART 500- GARAGE provides in part:
With respect to part (4) of WHO IS AN INSURED
the most WE will pay in the absence of any
other applicable insurance, is the minimum
limits required by the Motor Vehicle Laws of
North Carolina. When there is other
applicable insurance, WE will pay only OUR pro
rata share of such minimum limits.
Universal's “other insurance” provision provides in part:
The insurance afforded by this Coverage Part
is primary, except:
. . .
(2) WE will pay only OUR pro rata
share of the minimum limits required
by the Motor Vehicle Laws of North
Carolina when:
(a) any person or
organization under part
(3) or (4) of WHO IS AN
INSURED is using an AUTO
owned by YOU and insured
under the AUTO HAZARD.
Universal's policy limits were $25,000 per person injured.
Both parties moved for summary judgment and the trial court
granted Universal's motion, ordering Universal to “pay pro rata as
to the minimum limits or Universal is responsible for a 1/12 share”
of the $10,500 settlement, or $875 plus interest.
USAA argues the trial court erred in failing to give effect to
its “excess” insurance clause in determining the liability under
the policies. Specifically, USAA's coverage is “over and above
Universal's, since Universal directly insured the vehicle” involved
in the accident, so that the settlement should be paid entirely by
Universal's policy.
USAA concedes that the language in Universal's policy has been
previously examined by our Supreme Court and this Court in
Integon
Indemnity Corp. v. Universal Underwriters Ins. Co., 342 N.C. 166,
463 S.E.2d 389 (1995) (“
Integon I”), and
Integon Indemnity Corp. v.
Universal Underwriters Ins. Co., 131 N.C. App. 267, 507 S.E.2d 66
(1998) (“
Integon II”). In both cases, under substantially similar
facts and construing identical policies of Universal, our appellate
courts held that Universal was responsible for a pro rata share of
the minimum limits required by North Carolina's motor vehicle laws. In
Integon I, an automobile dealership lo
aned a car to Allen
and Hope Bridges (the Bridges), whose daughter subsequently was
involved in a collision while operating the vehicle with her
parents' permission.
Integon I, 342 N.C. at 167, 463 S.E.2d at
390. The Bridges were insured by Integon and the dealership was
insured by Universal.
Id. Integon's “other insurance” provision
provided that “any insurance we provide for a vehicle you do not
own shall be excess over any collectible insurance.”
Integon
Indemnity Corp. v. Universal Underwriters Ins. Co., 116 N.C. App.
279, 284, 447 S.E.2d 512, 515 (1994). Universal's “other
insurance” provision provided that it would only pay the pro rata
share of the minimum limits required by the Motor Vehicle Laws of
North Carolina.
Integon I, 342 N.C. at 170-71, 463 S.E.2d at 392.
Our Supreme Court held that, under Universal's policy, when the
driver has other applicable insurance, Universal is responsible for
paying a pro rata share of the minimum limits.
Id. at 170, 463
S.E.2d at 392.
In
Integon II, Randall Baucom rented a vehicle from Griffin
Motor Company, Inc., and subsequently was in a collision while
operating the vehicle.
Integon II, 131 N.C. App. at 268, 507
S.E.2d at 67. Baucom was insured by Integon and Griffin was
insured by Universal.
Id. The two policies' applicable coverage
provisions were the same as in
Integon I.
Id. at 269, 507 S.E.2dat 68. Just as in
Integon I, this Court held that, w
hen the driver
has other applicable insurance, Universal is responsible for paying
a pro rata share of the minimum limits.
Id. at 275, 507 S.E.2d at
71. Additionally, this Court stated that:
we note [Integon] has advanced no argument
asserting application in the instant case of
the coverage limitation in the Integon policy
“for a vehicle you do not own” to the “excess
over any other collectible insurance.”
Accordingly, we have not addressed, nor do we
express any opinion, as to the effect of this
provision upon our analysis herein.
Id.
Here, the applicable provisions of both policies may be given
effect without yielding a mutually repugnant interpretation. Under
Universal's policy, Lewis's USAA coverage is the other applicable
insurance; therefore, Universal is only obligated to pay a pro rata
share, or one-twelfth of $10,500.
See Integon I, 342 N.C. at 170,
463 S.E.2d at 392.
Under USAA's “excess” insurance clause, the “other valid and
collectible insurance” is Universal's pro rata share, or one-
twelfth of $10,500. Thus, USAA is obligated to pay the remainder.
USAA argues that
Integon I and
Integon II are distinguishable
in that those cases involved “test drivers or rental cars,” while
“Lewis was simply a permissive user.” This constitutes a
distinction without a difference and USAA's argument is without
merit.
See Integon II, 131 N.C. App. at 274, 507 S.E.2d at 71.
USAA also argues that Universal's “other insurance” clause
violates North Carolina law and public policy since the provision
allows Universal to defeat the statutory requirement of providingminimum limits of coverage under N.C. Gen. Stat. § 20-279.21.
Based upon
Integon I, USAA's argument is without merit.
Accordingly, the trial court did not err in granting summary
judgment for Universal.
Affirmed.
Judges LEWIS and MARTIN concur.
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