Insurance_uninsured motorist_determining amount due_credits for payment from other
carriers
There are two determinations to be made in determining the amount due a plaintiff from
an uninsured motorist policy: the limit of UIM coverage applicable to the motor vehicle and the
amount plaintiff is entitled to recover under the statute. This case was remanded for a
determination of the amount of loss suffered by plaintiff, which is necessary to the second
determination (the parties had stipulated only that the loss was in excess of $200,000). Finally,
Integon, the unnamed defendant, is not entitled to any credit by virtue of an overpayment to
plaintiff by the State Farm, another UIM carrier.
Law Offices of Johnny S. Gaskins, by Johnny S. Gaskins, for
plaintiff-appellee.
Bennett & Guthrie, P.L.L.C., by Rodney A. Guthrie, for unnamed
defendant-appellant, Integon National Insurance Company.
STEELMAN, Judge.
This matter was previously heard by the Court of Appeals on 14
May 2003, and a decision was rendered in Austin v. Midgett, 159
N.C. App. 416, 583 S.E.2d 405 (2003). On 23 September 2003,
pursuant to Rule 31 of the North Carolina Rules of Appellate
Procedure, this Court granted the petition of the unnamed
defendant, Integon National Insurance Company (Integon), for
rehearing. This Court granted the petition to rehear on thelimited issue of the proper application of a credit arising out of
a $50,000.00 payment made by Farm Bureau in this matter.
The facts in this matter are set forth in this Court's
previous opinion, Austin v. Midgett, 159 N.C. App. 416, 583 S.E.2d
405 (2003).
Integon contends that this Court erred in the application of
the credits due to Integon as an underinsured motorist (UIM)
carrier for the payments made by the primary liability insurance
carrier. We agree and remand this matter to the trial court for
further findings.
This issue requires the construction of N.C. Gen. Stat. § 20-
279.21(b)(4), which defines the limit of underinsured motorist
coverage:
Underinsured motorist coverage is deemed to
apply to the first dollar of an underinsured
motorist coverage claim beyond amounts paid to
the claimant under the exhausted liability
policy.
In any event, the limit of
underinsured motorist coverage applicable to
any claim is determined to be the difference
between the amount paid to the claimant under
the exhausted liability policy or policies and
the limit of underinsured motorist coverage
applicable to the motor vehicle involved in
the accident.
N.C. Gen. Stat. § 20-279.21(b)(4) (2003) (emphasis added).
In our original decision we held that the payments made under
the exhausted liability policy reduced the limit of liability of
the UIM carrier. While this holding was correct in terms of the
total potential exposure of the UIM carrier, it resulted in an
incorrect computation of the amount that the appellant Integon was
required to pay to plaintiff. We now hold that there are twodeterminations that must be made in determining the amount due to
a plaintiff from an underinsured motorist coverage policy.
First, we must determine the
“
limit of underinsured motorist
coverage applicable to the motor vehicle involved in the accident.
”
N.C. Gen. Stat. § 20-279.21(b)(4). This is determined by taking
Integon's policy limits for underinsured motorist coverage of
$100,000.00 and subtracting the portion of the credit for the Farm
Bureau policy to which Integon is entitled of $25,000.00.
(See footnote 1)
This
leaves a total of $75,000.00 of underinsured motorist coverage
available to plaintiff under Integon's policy. This is the limit
of Integon's exposure in this case.
Second, we must determine the amount that plaintiff is
entitled to recover under the provisions of N.C. Gen. Stat. § 20-
279.21(b)(4) and 20-279.21(e). Our previous opinion held that
plaintiff was entitled to recover from Integon, the sum of
$66,573.51 under the UIM coverage, together with any accrued
prejudgment interest up to its limit of liability of $75,000.00.
However, ths calculation failed to take into account the fact that
plaintiff had already received $25,000.00 towards the Integon
portion of the UIM claim from Farm Bureau. As Integon correctly
points out, this computation results in a $25,000.00 windfall to
the plaintiff. In this matter, the parties entered into a number of
stipulations. Two of these stipulations are relevant to our
resolution of this case:
4. The amount of damages sustained by the
Estate of Medford Jerome Austin exceeds the
sum of two hundred thousand dollars
($200,000.00).
11. In exchange for plaintiff's covenant
recited above, State Farm and Integon will
consent to a Judgment in this action in favor
of the plaintiff in the amount of $200,000.00.
N.C. Gen. Stat. § 20-279.21(e) provides that:
Uninsured or underinsured motorist coverage
that is provided as part of a motor vehicle
liability policy shall insure that portion of
a loss uncompensated by any workers'
compensation law and the amount of an
employer's lien determined pursuant to G.S.
97-10.2(h) or (j). In no event shall this
subsection be construed to require that
coverage exceed the applicable uninsured or
underinsured coverage limits of the motor
vehicle policy or allow a recovery for damages
already paid by workers' compensation.
N.C. Gen. Stat. § 20-279.21(e) (2003). The parties stipulated the
loss suffered by the estate “exceeds the sum of two hundred
thousand dollars.” N.C. Gen. Stat. § 20-279.21(e) provides that
uninsured or underinsured motorist coverage “shall insure that
portion of a loss uncompensated by any workers' compensation
law[.]” In this case, we do not know the exact amount of the loss
plaintiff suffered, only that it is in excess of $200,000.00. Even
though the parties stipulated as to the amount of the judgment to
be entered, we cannot use this amount as a substitute for the total
loss incurred. This is so because this stipulation only serves to
cap the overall liability of the individual defendants and the
underinsured motorist carriers, not the total loss suffered. Wetherefore remand this matter to the trial court to determine the
amount of the total loss suffered by plaintiff. Once the trial
court determines this amount, it shall compute the amount due to
plaintiff from the underinsured motorist carrier, Integon, in
accordance with the remainder of this opinion.
The total amount of the loss shall be reduced by the amount of
workers' compensation payments received by plaintiff of
$100,278.98. To this amount, there shall be added the amount of
the workers' compensation lien of $33,426.00. (Under the
provisions of N.C. Gen. Stat. § 20-279.21(e) the uninsured and
underinsured motorist carriers are liable for the amount of this
lien.) This sum shall then be reduced by the $50,000.00 payment
made by the primary carrier, Farm Bureau. The figure determined
shall then be divided in half because Integon and State Farm each
had a $100,000.00 UIM policy. Integon shall be liable for that
amount, plus any prejudgment interest applicable under the
provisions of Chapter 24 of the North Carolina General Statutes, up
to the limit of its underinsured motorist coverage of $75,000.00,
as computed above.
Integon further argues that it is entitled to a credit for the
amount that State Farm paid under its UIM policy over and above the
amounts due under the above computation. The judgment of the trial
court established liability of the two UIM carriers separately.
State Farm elected not to appeal Judge Parker's judgment. The only
matter before this Court is the appeal of Integon, and we find that
Integon is not entitled to any credit by virtue of any overpayment
that might possibly have been made to plaintiff by State Farm. This matter is remanded to the Superior Court of Dare County
for a determination of the total loss incurred by plaintiff as
required under N.C. Gen. Stat. § 20-279.21(e) and the computation
of the amount owed by Integon to plaintiff in accordance with this
opinion.
Judges TIMMONS-GOODSON and HUDSON concur.
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