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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
MILO J. HOFFMAN, JR., Plaintiff, v. GREAT AMERICAN ALLIANCE
INSURANCE COMPANY, AMERICAN ALLIANCE INSURANCE COMPANY, GREAT
AMERICAN ASSURANCE COMPANY, INC., f/k/a AGRICULTURAL INSURANCE
COMPANY and GREAT AMERICAN INSURANCE COMPANY, Defendants
Filed: 21 September 2004
Insurance_uninsured motorist_collision with bicycle_ police report and timely notice of
Summary judgment was correctly granted for defendants on an uninsured motorist claim
arising from a bicycle accident where plaintiff made no showing that he complied with clear and
unambiguous policy terms or the statutory requirements of N.C.G.S. § 20-279.21(b)(3)(b).
Plaintiff never filed a police report and waited five days to contact his insurance agent; he
expressed doubt in his initial statements about whether he had been struck at all and his bicycle
showed no damage; and his failure to provide information to the police on the day of the accident
materially prejudiced the insurer's ability to investigate and defend the claim.
Appeal by plaintiff from judgments entered 2 May 2003 and 9
May 2003 by Judge Kenneth C. Titus in Orange County Superior Court.
Heard in the Court of Appeals 21 April 2004.
Poe, Hoof & Associates, by J. Bruce Hoof, for plaintiff-
Haywood, Denny & Miller, L.L.P., by George W. Miller, Jr., for
Dr. Milo J. Hoffman, Jr. (plaintiff) appeals from summary
judgment entered for Great American Alliance Insurance Company,
American Alliance Insurance Company, and Great American Assurance
Company, Inc., (collectively, defendants) and the trial court's
dismissal of plaintiff's action with prejudice for failure of
plaintiff to: (1) allege specific facts upon which to base a
claim; and (2) allege compliance with conditions precedent to
making a claim for uninsured motorist (UM) coverage. We affirm.
Plaintiff was riding his bicycle on the edge of a two-lane
road at 7:30 a.m. on 8 July 1999 while on vacation in Ocean Drive
Beach, South Carolina. A car approached plaintiff from behind and
attempted to pass him. As the car pulled out to pass [plaintiff],
[the driver] didn't pull out very far. Plaintiff claimed that
before the car passed by him completely, I turned my bike away
from the vehicle and started to go off the road. And my attention
is diverted and I am not looking to the left. I am looking to the
right where I am getting ready to go looking for, you know, any
obstacles or anything. No other vehicles were on the road and
plaintiff was able to describe in detail information about the
driver and the vehicle.
Plaintiff stated his bicycle was traveling between 18 and 20
miles per hour at the time of the incident and the vehicle was
traveling approximately 25 miles per hour. When asked about the
topography of the land surrounding the road, plaintiff stated in
his deposition there was a little grass growing, yeah. I mean,
it's sand with grass growing in it, but there's grass. Plaintiff
further claims before he fell off his bike, there's a good
possibility the front wheel had already left the roadway and a
third of the driver's car had already passed him.
After falling, plaintiff thought he only skinned his knee. He
finished his bike ride then rode back to his vacation home without
reporting the accident to the police. As the day progressed,
plaintiff's wrist and arm began swelling and he sought treatment at
North Myrtle Beach Emergency Care where his wrist and elbow were x-rayed twice. The doctor on duty told plaintiff that his wrist was
sprained and recommended that plaintiff wear a sling for a few
days. Plaintiff did not notify a law enforcement officer, his
insurance agent, or defendants of the alleged hit and run
Plaintiff returned to his home in Chapel Hill four days after
the accident. Plaintiff felt increased pain in his arm and sought
treatment on 13 July 1999 from Dr. Paul Wright, an orthopaedic
surgeon, who correctly diagnosed and treated plaintiff for two
fractures in his right arm. Plaintiff is a right-handed dentist,
and the injury hampered his ability to practice dentistry in his
usual manner for a substantial period of time.
On the same day plaintiff learned that he had fractured his
right arm, plaintiff contacted his insurance agent, Don White.
Plaintiff had an automobile insurance policy with defendants that
provided plaintiff with UM coverage. Plaintiff's coverage required
that [defendants] must be notified promptly of how, when and where
the accident or loss happened. Furthermore, plaintiff's coverage
stated that [a] person seeking Uninsured or Combined
Uninsured/Underinsured Motorists Coverage must also: 1. Promptly
notify the police if a hit-and-run driver is involved. On 19 July
1999, plaintiff's insurance agent responded to plaintiff by letter
Given that you cannot categorically state that
you were actually struck by the hit and run
automobile, and that a report was not made to
the local police department, thoughts of a UM
claim did not even enter my mind. In fact, in
the absence of actually having been struck by
the automobile, I was of the impression that
the possibility of even having a compensableMedical Payments claim was doubtful.
Plaintiff's insurance agent filed a UM claim on 19 July 1999.
On 11 August 1999, defendants contacted plaintiff by letter
requesting a recorded statement via telephone. Defendants spoke
with plaintiff on 17 August 1999 and recorded his statement
regarding the accident. In the statement, plaintiff told
defendants that he believe[d] that the driver kind of bumped my
rear tire . . . and that's what sent me flying. When defendants
asked plaintiff if he was certain the car made contact with the
bike, plaintiff responded:
Uh, what is certainty? Do I have damage to my
bicycle? No. Do I have memory that I was
absolutely struck beyond a shadow of a doubt.
But it is my belief that I was bumped by the
car because of the way that all things
happened . . . I mean, I'm riding my bike,
everything's fine, I'm turning away from that
car and the next thing I know I'm flying
through the air.
Defendants denied plaintiff's claim on 9 September 1999
because plaintiff advised [he] could not make a statement under
oath that a vehicle struck [him]. After plaintiff's claim was
denied, he retained an attorney. Plaintiff's attorney received a
letter from defendants on 6 December 1999 stating that the claim
was denied because, [y]our client's statement was unclear as to
whether or not he was struck by this phantom vehicle.
Plaintiff filed a complaint on 8 July 2002 against defendants
alleging defendants failed to compensate plaintiff for bodily
injury pursuant to plaintiff's UM coverage provided by defendants.
On 29 October 2002 defendants answered, denied they breached their
obligation to compensate plaintiff, moved to dismiss pursuant toRule 12(b)(6), and alleged plaintiff failed to comply with the
requirements for filing a UM claim. Defendants moved for and were
granted summary judgment on 11 April 2003. Plaintiff appeals.
The sole issue is whether the trial court erred in granting
defendant's motion for summary judgment on the grounds plaintiff
failed to comply with the requirements of the insurance policy.
III. Standard of Review
Our standard to review the grant of a motion for summary
judgment is whether any genuine issue of material fact exists and
whether the moving party is entitled to judgment as a matter of
law. Draughon v. Harnett Cty. Bd. of Educ., 158 N.C. App. 705,
707-08, 582 S.E.2d 343, 345 (2003), aff'd, 358 N.C. 137, 591 S.E.2d
520 (2004), reh'g denied, 358 N.C. 381, 597 S.E.2d 129 (2004)
(citing Willis v. Town of Beaufort, 143 N.C. App. 106, 108, 544
S.E.2d 600, 603, disc. rev. denied, 354 N.C. 371, 555 S.E.2d 280
(2001)); see also N.C. Gen. Stat. § 1A-1, Rule 56(c) (2003).
A defendant may show entitlement to summary
judgment by (1) proving that an essential
element of the plaintiff's case is
non-existent, or (2) showing through discovery
that the plaintiff cannot produce evidence to
support an essential element of his or her
claim, or (3) showing that the plaintiff
cannot surmount an affirmative defense.
Draughon, 158 N.C. App. at 708, 582 S.E.2d at 345 (quoting James v.
Clark, 118 N.C. App. 178, 181, 454 S.E.2d 826, 828, disc. rev.
denied, 340 N.C. 359, 458 S.E.2d 187 (1995)). Once the party
seeking summary judgment makes the required showing, the burden
shifts to the nonmoving party to produce a forecast of evidence
demonstrating specific facts, as opposed to allegations, showingthat he can at least establish a prima facie case at trial.'
Draughon, 158 N.C. App. at 708, 582 S.E.2d at 345 (quoting Gaunt
v. Pittaway, 139 N.C. App. 778, 784-85, 534 S.E.2d 660, 664, disc.
rev. denied, 353 N.C. 262, 546 S.E.2d 401 (2000), cert. denied, 353
N.C. 371, 547 S.E.2d 810 (2001)).
IV. Conditions Precedent and Statutory Requirements
Here, plaintiff does not assert that summary judgment was
inappropriately granted because genuine issues of material facts
are in dispute. Rather, plaintiff argues the trial court erred in
its interpretation of a question of law. We disagree. A
policyholder's failure to promptly notify the insurer and law
enforcement of an accident involving a hit and run driver, as
required by both the insurance policy and N.C. Gen. Stat. § 20-
279.21(b)(3)(b), serves as a bar to plaintiff's UM claim. The
trial court reached the appropriate conclusion of law.
A. Statutory Provisions
The specific statutory and policy provisions upon which
defendants rely are found in the Financial Responsibility Act
(FRA) at N.C. Gen. Stat. § 20-279.21(b)(3)(b). Plaintiff's UM
coverage requires [defendants] must be notified promptly of how,
when and where the accident or loss happened. Further,
plaintiff's policy stated that [a] person seeking Uninsured or
Combined Uninsured/Underinsured Motorists Coverage must also: 1.
Promptly notify the police if a hit-and-run driver is involved.
The statutory provision governing UM claims requires:
[w]here the insured, under the uninsured
motorist coverage, claims that he has
sustained bodily injury as the result of
collision between motor vehicles and assertsthat the identity of the operator or owner of
the vehicle (other than a vehicle in which the
insured is a passenger) cannot be ascertained,
the insured may institute an action directly
against the insurer: Provided, in that event
the insured, or someone in his behalf, shall
report the accident within 24 hours or as soon
thereafter as may be practicable, to a police
officer . . . .
N.C. Gen. Stat. § 20-279.21(b)(3)(b) (emphasis supplied). The
provisions of the statute enter into and form a part of the
policy. Lichtenberger v. Insurance Co., 7 N.C. App. 269, 273, 172
S.E.2d 284, 287 (1970).
The primary goal of statutory construction is to effectuate
the purpose of the legislature in enacting the statute. Woodson v.
Rowland, 329 N.C. 330, 338, 407 S.E.2d 222, 227 (1991); Sutton v.
Aetna Cas. & Sur. Co., 325 N.C. 259, 265, 382 S.E.2d 759, 763,
reh'g denied, 325 N.C. 437, 384 S.E.2d 546 (1989). The avowed
purpose of the [FRA] . . . is to compensate the innocent victims of
financially irresponsible motorists. Sutton, 325 N.C. at 265, 382
S.E.2d at 763. The Act is remedial in nature and is to be
liberally construed so that the beneficial purpose intended by its
enactment may be accomplished. Id. The purpose of the Act, is
best served when [every provision of the Act] is interpreted to
provide the innocent victim with the fullest possible protection.
Proctor v. N.C. Farm Bureau Mutual Ins. Co., 324 N.C. 221, 225, 376
S.E.2d 761, 764 (1989).
While there is no dispute concerning the established purpose
of the FRA, the statute requires physical contact, which shows
the intent to protect insurance companies from fraudulent hit and
run claims that were actually caused by the insured's negligence.Andersen v. Baccus, 109 N.C. App. 16, 20, 426 S.E.2d 105, 108
(1993) (citing McNeil v. Hartford Accident and Indemn. Co., 84 N.C.
App. 438, 442, 352 S.E.2d 915, 917 (1987)).
The legislative purpose of a statute is first ascertained by
examining the statute's plain language. Correll v. Division of
Social Services, 332 N.C. 141, 144, 418 S.E.2d 232, 235 (1992).
Where the language of a statute is clear and unambiguous, there is
no room for judicial construction and the courts must give [the
statute] its plain and definite meaning, and are without power to
interpolate, or superimpose, provisions and limitations not
contained therein. State v. Camp, 286 N.C. 148, 152, 209 S.E.2d
754, 756 (1974) (quoting 7 Strong, N.C. Index 2d, Statutes § 5
(1968)). The plain language of N.C. Gen. Stat. § 20-
279.21(b)(3)(b) states the insured, or someone in his behalf,
shall report the accident within 24 hours or as soon thereafter as
may be practicable, to a police officer[.] (Emphasis supplied).
Defendants assert plaintiff never filed a police report,
despite his detailed knowledge of the car and driver that
purportedly hit him, and that he was advised to do so, in the
insurance agent's letter to plaintiff, dated 19 July 1999. The
requirement that the insured must contact a law enforcement officer
satisfies both purposes of the FRA: (1) to protect innocent
victims; and (2) to prevent fraudulent claims. When, the insured
fails to comply with the statutory requirements of prompt notice of
hit and run incidents to the police, the legislature's intent to
prevent fraudulent claims is nullified.
In addition to requiring notice of a hit and run to thepolice, both N.C. Gen. Stat. § 20-279.21(b)(3)(b) and the insurance
policy require notice of the accident to the insurance carrier. We
find no cases that have previously interpreted the notice to police
provisions under the UM statute. Plaintiff argues our Supreme
Court's interpretation of notice to insurance carriers applies to
notice to the police, citing Great American Ins. Co. v. C. G. Tate
Construction Co., 315 N.C. 714, 340 S.E.2d 743 (1986) (Tate I)
and Liberty Mut. Ins. Co. v. Pennington, 356 N.C. 571, 573 S.E.2d
118 (2002) (Pennington).
Plaintiff asserts it is logical that the Supreme Court's
interpretation of the notice to carrier provision regarding
liability claims (Tate I) and underinsured motorists (UIM) claims
(Pennington) applies equally to the notice to police provision for
UM claims presented here. Under N.C. Gen. Stat. § 20-279.21(b)(4),
there is no requirement that the underinsured motorist notify the
police. The statute merely directs the insured to give notice of
the initiation of the suit to the underinsured motorist insurer.
N.C. Gen. Stat. § 20-279.21(b)(4) (emphasis supplied). The statute
does not prescribe the type of notice, the content of the notice,
or the method by which it is to be given. The statute is similarly
devoid of any particulars concerning the time frame when notice to
the insurer must be provided. Given the lack of direction and
specificity of N.C. Gen. Stat. § 20-279.21(b)(4) regarding the
notification requirement, we do not agree the legislature intended
N.C. Gen. Stat. § 20-279.21(b)(3)(b) to be interpreted as
liberally as N.C. Gen. Stat. § 20-279.21(b)(4), particularly when
a hit and run, a serious criminal act, occurred. See Proctor, 324N.C. at 225, 376 S.E.2d at 764.
The differences in the two notice requirements show the
legislature did not intend these provisions be constructed the
same. N.C. Gen. Stat. § 20-279.21(b)(3)(b) unequivocally requires
that the insured, or someone in his behalf, shall report the
accident within 24 hours or as soon thereafter as may be
practicable, to a police officer . . . .(Emphasis supplied). In
sharp contrast, N.C. Gen. Stat. § 20-279.21(b)(4) does not specify
the form, substance, or manner of the notice to be given the UIM
carrier. These key distinctions show the legislature's intent that
plaintiff is subject to the more stringent requirements of N.C.
Gen. Stat. § 20-279.21(b)(3)(b), not the notice provision of N.C.
Gen. Stat. § 20-279.21(b)(4) as plaintiff asserts. Plaintiff's
claim for UM benefits was absolutely barred by his failure to
comply with the specific notice requirements as set forth in N.C.
Gen. Stat. § 20-279.21(b)(3)(b), and the plain and unambiguous
requirements of the insurance contract. Defendant asserts
plaintiff never notified any law enforcement officer of the alleged
B. Analysis Under Tate I and Pennington
Plaintiff argues the Tate I and Pennington analysis should be
extended to hit and run UM claims. We disagree. Plaintiff failed
to meet the three-prong test devised by the Supreme Court in
liability claims (Tate I) and UIM claims (Pennington). Pennington
set forth the three-pronged test to determine whether late notice
to an insurer bars recovery:
When faced with a claim that notice was not
timely given, the trier of fact must firstdecide whether the notice was given as soon as
practicable. If not, the trier of fact must
decide whether the insured has shown that he
acted in good faith, e.g., that he had no
actual knowledge that a claim might be filed
against him. If the good faith test is met the
burden then shifts to the insurer to show that
its ability to investigate and defend was
materially prejudiced by the delay.
Pennington, 356 N.C. at 580, 573 S.E.2d at 124 (quoting Great Am.
Ins. Co., 303 N.C. at 399, 279 S.E.2d at 776). Here, plaintiff
concedes that he did not notify defendants of the claim for UM
coverage on the day he was injured, or immediately thereafter, and
does not affirmatively assert he ever filed a police report to
comply with the statute or the express provisions of the insurance
Plaintiff also fails the second prong of the Tate I analysis:
whether plaintiff acted in good faith after his failure to timely
notify defendants. The record shows that plaintiff did not
promptly notify defendants of the alleged accident. Under our
Supreme Court's analysis of the three-part test, the good faith
inquiry is a subjective inquiry that examines a plaintiff's actual
knowledge at the time of the accident. Tate, 315 N.C. at 720, 340
S.E.2d at 747.
Plaintiff testified in his deposition that on the day of the
accident, his wrist became sore. As the day progressed, plaintiff
sought treatment at North Myrtle Beach Emergency Care, where his
wrist and elbow were x-rayed twice. The doctor on duty told
plaintiff that his wrist was sprained and that he should wear a
sling for a few days. Plaintiff did not contact defendants or the
police. On the day of the accident, plaintiff actually knew hehad suffered a bodily injury and failed to promptly report it to
either his insurance agent or to law enforcement. Plaintiff
expressed doubt whether the vehicle made any contact with
plaintiff's bicycle in his reports to his agent and in his recorded
interview. Instead, plaintiff waited five days to contact his
insurance agent and never filed the police report.
The third prong of the Pennington test is: whether the delay
materially prejudiced the insurer's ability to investigate and
defend the UM claim as a result of the delay. 356 N.C. at 580, 573
S.E.2d at 124. The following factors are relevant considerations by
the availability of witnesses to the accident;
the ability to discover other information
regarding the conditions of the locale where
the accident occurred; any physical changes in
the location of the accident during the period
of delay; the existence of official reports
concerning the occurrence; the preparation and
preservation of demonstrative and illustrative
evidence, such as the vehicles involved in the
occurrence, or photographs and diagrams of the
scene; the ability of experts to reconstruct
the scene and the occurrence; and so on.
Insurance Co., 303 N.C. at 398, 279 S.E.2d at 776 (quoting Great
Am. Ins. Co. v. C.G. Tate Constr. Co., 46 N.C. App. 427, 437, 265
S.E.2d 467, 473 (1980), modified by, 303 N.C. 387, 279 S.E.2d 769
The third prong of the Pennington test is not designed to
determine whether the insurer has suffered material prejudice in
any and all respects. Rather, the prejudice relates to the ability
of the insurer to investigate and attempt to discover the identity
of the hit and run driver to defend the claim in question. See
Great Am. Ins. Co., 303 N.C. at 397-400, 279 S.E.2d at 775-77. Inhis statement to the insurance company, plaintiff states:
I can tell you that there was a lady driving
the car, I can tell you that she did not
appear to be a really young person or a real
old gray haired. I can tell you that the car
was a whitish color, possibly an off white, or
a real dirty car, a dirty white, and an
American car, not a brand new one. . . . the
license plate was almost an orange kind of
color. I spotted a license plate at a
distance a couple of days later that appeared
to be the same color and as I drove up on that
car it was a Pennsylvania plate[.]
Further, in his deposition, plaintiff testified that the driver was
a Caucasian female and no passengers were traveling with the
driver. Given the incident occurred in a resort area, at the height
of the tourist season, on a clear morning, where no other vehicles
were present and the specificity of detail the plaintiff knew about
the possible out-of-state driver and vehicle, his failure to
promptly provide this pertinent information to the police on the
day of the accident materially prejudiced the insurer's ability to
investigate, determine the identity of the driver of the vehicle,
and its ability to defend the UM claim. Substantial evidence in
the record supports the trial court's conclusion. Plaintiff's
argument to extend the three-pronged test in Tate I and Pennington
to determine whether late notice to an insurer bars recovery is
without merit. The UM statute clearly and plainly requires the
filing of a police report and notice within a reasonable time to
the insurer for hit and run UM claims.
Viewed in the light most favorable to plaintiff, plaintiff
made no showing that he complied with the clear and unambiguous
policy terms or statutory requirements of N.C. Gen. Stat. § 20-279.21(b)(3)(b). Plaintiff was put on notice from his insurance
agent, less than eleven days after the incident occurred, of the
requirement to file a police report. In his initial statements to
his insurance agent and in his recorded statement within a month
after the accident, plaintiff expressed doubt whether he had been
struck at all. Plaintiff's bicycle showed no damage and he
continued to ride his undamaged bicycle for blocks following the
incident. The trial court properly granted summary judgment to
defendants. The judgment of the trial court is affirmed.
Judges McGEE and TIMMONS-GOODSON concur.
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