NO. COA03-1220

NORTH CAROLINA COURT OF APPEALS

Filed: 20 July 2004

    Appeal by defendant Nationwide Mutual Insurance Company from an order entered 27 June 2003 by Judge Howard E. Manning, Jr. in Wake County Superior Court. Heard in the Court of Appeals 19 May 2004.

    McDaniel & Anderson, L.L.P., by John M. Kirby and William E. Anderson, for plaintiff-appellee.
    
    George L. Simpson, III, for defendant-appellant Nationwide Mutual Insurance Company.

    No brief filed on behalf of defendant-appellee Atlantic Indemnity Company.


    GEER, Judge.

    Defendant Nationwide Mutual Insurance Company ("Nationwide") appeals from an order holding it liable on a pro rata basis with plaintiff Harleysville Mutual Insurance Company ("Harleysville")and co-defendant Atlantic Indemnity Company ("Atlantic") for injuries sustained by a person who was a Class I insured of all three insurers. Nationwide acknowledges that North Carolina Farm Bureau, Mut. Ins. Co. v. Bost, 126 N.C. App. 42, 483 S.E.2d 452, disc. review denied, 347 N.C. 138, 492 S.E.2d 25 (1997), is contrary to its position, but asks us to revisit Bost. Because one panel of this Court may not overrule another panel, we affirm. In the Matter of Appeal from Civil Penalty, 324 N.C. 373, 379 S.E.2d 30 (1989).
    The parties stipulated to the following facts. On 15 February 2000, Silvia Perez was injured when the 1999 Mitsubishi she was driving collided with a vehicle negligently driven by Manuel Juarez. Since neither Juarez nor the owner of his vehicle had liability coverage, the vehicle constituted an "uninsured motor vehicle," as defined by N.C. Gen. Stat. § 20-279.21(b)(3) (2003).
    At the time of the accident, Silvia Perez lived with her father, Isidro Perez, and her brother, Edgar Perez. All three had automobile insurance policies and Silvia Perez was a Class I insured under each of the policies.
    Perez and her father jointly leased the 1999 Mitsubishi she was driving. The vehicle was used primarily by Silvia Perez, who insured it under a Harleysville personal automobile policy issued to her as the sole named insured. That policy provided uninsuredmotorist ("UM") bodily injury coverage with limits of $100,000 per person and $300,000 per accident. As the named insured, Silvia Perez was a Class I insured for purposes of the Harleysville policy's UM coverage.
    Isidro Perez insured a 1994 Dodge Dakota under an Atlantic policy issued to him as the sole named insured. The Atlantic policy provided UM bodily injury coverage with limits of $25,000 per person and $50,000 per accident. As a relative residing in Isidro Perez' household, Silvia Perez was also a Class I insured under the terms of the Atlantic policy.
    Edgar Perez insured his 1992 Mitsubishi and 2000 Ford under a Nationwide policy issued to him as the sole named insured. The Nationwide policy provided UM bodily injury coverage with limits of $100,000 per person and $300,000 per accident. Silvia Perez was a Class I insured for purposes of the Nationwide policy because she was a relative residing in Edgar Perez' household.
    Each of the polices contained identically worded "Other Insurance" clauses governing primary and excess coverage:
        [I]f there is other applicable similar 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 vehicle you do not own shall be excess over any other collectible insurance.
    On 18 May 2001, Silvia Perez filed suit in Nash County Superior Court against Juarez and the owner of his car to recover damages for the injuries she sustained in the accident. Pursuant to N.C. Gen. Stat. § 20-279.21(b)(3), Perez also served the complaint on Harleysville, Atlantic, and Nationwide as UM insurers.     At the mediation of Silvia Perez' action, Nationwide declined to contribute toward any settlement, arguing that the UM coverage provided by its policy was "excess" to that of Harleysville and Atlantic and that the value of Silvia Perez' claim was less than the UM coverage provided by the combined Harleysville and Atlantic policies. The three insurers, however, agreed that if Harleysville and Atlantic settled the claim for $40,000 or less, Nationwide would not challenge the reasonableness of the settlement in any later action to determine primary and excess coverage.
    Ms. Perez ultimately settled her claim for $50,000, with Harleysville paying $40,000 and Atlantic paying $10,000. Notwithstanding the settlement amount, the insurers agreed that if the court held Nationwide liable on a pro rata basis, it would be required to pay only a pro rata share of $40,000. The insurers also agreed that if a court determined that the Nationwide policy was excess to the Harleysville and Atlantic policies, Nationwide would not be liable in any amount.
    Harleysville filed a declaratory judgment action to determinethe liability of the insurers under their respective policies. Harleysville and Nationwide filed cross-motions for summary judgment and submitted to the trial court stipulated facts. The trial court allowed Harleysville's motion for summary judgment and denied Nationwide's motion based on Bost, holding "[t]he Court renders this Order based solely on [Bost], and the Court believes that the issue presented is controlled by Bost[.]" Nationwide timely appealed from this order.
    We agree with the trial court that this case is controlled by Bost. In Bost, this Court addressed "whether Farm Bureau's [underinsured motorist (UIM)] coverage is 'primary' as to defendant Allstate's coverage" based on "Other Insurance" clauses identical to the clauses at issue here. 126 N.C. App. at 45, 483 S.E.2d at 455. This Court first noted two principles: (1) "All persons in the first class are treated the same for insurance purposes[;]" and (2) "[w]hen 'excess' clauses in several policies are identical, the clauses are deemed mutually repugnant and neither excess clause will be given effect, leaving the insured's claim to be pro rated between the separate policies according to their respective limits." Id. at 52, 483 S.E.2d at 458-59. Based on these principles, this Court held:
        Both Farm Bureau and defendant Allstate insured Carrie Bost [the injured person] as a first class insured because she was a relativeand resident of the households of both Larry and Cara Bost. Both policies have "Other Insurance" provisions which are identical, and therefore, the provisions nullify each other, leaving Farm Bureau and defendant Allstate to share the [personal injury] settlement on a pro rata basis.

Id., 483 S.E.2d at 459.
    There is no dispute that Ms. Perez is a Class I insured under all three policies and that the "Other Insurance" clauses in all three policies are worded identically. Under Bost, each insurer is required to participate in the settlement on a pro rata basis.
    Nationwide acknowledges "that on its face Bost appears to apply in the present case." It argues, nevertheless, that Bost is inconsistent with Isenhour v. Universal Underwriters Ins. Co., 341 N.C. 597, 461 S.E.2d 317 (1995). In Isenhour, the Supreme Court was not addressing two policies with identical _ and, therefore, potentially conflicting _ "Other Insurance" clauses. The plaintiff in Isenhour was injured while driving a vehicle owned by his employer. The employer's fleet automobile policy provided that "[t]he insurance afforded by the endorsement is primary, except it is excess for any COVERED AUTO not owned by the INSURED or any trailer attached to it." Id. at 608, 461 S.E.2d at 323. The plaintiff's policy provided, however, that "[a]ny insurance we provide with respect to a vehicle you do not own shall be excess over any other collectible insurance." Id., 461 S.E.2d at 324. Inshort, under both policies, the employer's insurance was primary while the plaintiff's insurance was excess. Isenhour thus does not address the situation presented in Bost in which the plaintiff is a Class I insured under each of the policies and all of the policies have identical and, therefore, conflicting "Other Insurance" clauses.
    While Nationwide points to two decisions by this Court subsequent to Bost as supporting its position, each of those cases recognizes that Bost controls when, as here, the injured party is a Class I insured under each of the policies at issue. Thus, in Iodice v. Jones, 133 N.C. App. 76, 79 n.3, 514 S.E.2d 291, 293 n.3 (1999), this Court, when considering a plaintiff who was a Class I insured under one policy and a Class II insured under the other, wrote: "The holding in [Bost] is distinguishable and thus not determinative of this case. Bost required a pro rata division of the set-off credit where the 'other insurance' clauses were identically worded, in part because the plaintiff therein was a Class I insured under both policies." In Hlasnick v. Federated Mut. Ins. Co., 136 N.C. App. 320, 330, 524 S.E.2d 386, 393, aff'd on other grounds in part and disc. review improvidently allowed in part, 353 N.C. 240, 539 S.E.2d 274 (2000), this Court cited and relied upon Bost for the principle controlling in this case: "Where an insured is in the same class under two policies and the'other insurance' clauses in the policies are mutually repugnant, the claims will be prorated." Under Bost, the trial court, therefore, properly granted summary judgment to Harleysville.

    Affirmed.
    Judges BRYANT and ELMORE concur.
    Report per Rule 30(e).

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