An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NORTH CAROLINA COURT OF APPEALS
Filed: 5 December 2006
DAVID JONATHAN MILLER,
PROGRESSIVE AMERICAN INSURANCE
Appeal by defendant from judgment entered 14 October 2005 by
Judge Robert B. Rader in Wake County Superior Court. Heard in the
Court of Appeals 31 October 2006.
E. Gregory Stott for plaintiff appellee.
Young Moore and Henderson P.A., by Glenn C. Raynor, for
Defendant appeals from a judgment granting plaintiff's motion
for summary judgment and denying defendant's motion for summary
judgment. We reverse.
Plaintiff David Jonathan Miller (plaintiff) and Amy Miller
(A. Miller) were involved in a two-vehicle automobile accident on
21 December 2000. Plaintiff and A. Miller were in one vehicle, and
Carmelo Lule Martinez (Martinez) and Casimiro Nino (Nino) were
in another vehicle. Defendant Progressive American Insurance
Company (defendant) was the automobile liability insurancecarrier which insured the vehicle operated by Martinez and owned by
On 24 May 2001, A. Miller filed a complaint against Martinez
and Nino seeking damages from the accident. The case went before a
jury at the 29 April 2002 Session of Civil District Court, Wake
County, North Carolina. The jury found for defendants, and a
judgment was filed on 4 June 2002.
On 28 June 2002, plaintiff filed a complaint against Martinez
and Nino seeking damages from the accident. A default judgment was
entered against Martinez and Nino. Then, defendant filed a motion
to set aside the entry of default, set aside the default judgment,
and enlarge the time to file responsive pleadings. On 16 June
2003, the trial judge entered an order which denied defendant's
Then, plaintiff filed this action against defendant seeking
the damages awarded to plaintiff by the default judgment in the
prior action against Martinez and Nino. Defendant denied the
existence of coverage under the insurance policy on the basis that
Martinez and Nino, as the insureds, failed to notify defendant of
the lawsuit prior to entry of default.
Both plaintiff and defendant filed motions for summary
judgment. Then, on 13 October 2005, the trial court issued an
order requiring defendant to make payment of all damages awarded to
plaintiff by the default judgment in the prior action against
Martinez and Nino.
Defendant contends that the trial court erred in granting
plaintiff's motion for summary judgment. We agree.
On appeal from a grant of summary judgment, this Court reviews
the trial court's decision de novo. Falk Integrated Tech., Inc. v.
Stack, 132 N.C. App. 807, 809, 513 S.E.2d 572, 574 (1999). Granting
summary judgment is appropriate only if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that any party is entitled to a
judgment as a matter of law. N.C. Gen. Stat. § 1A-1, Rule 56(c)
The analysis begins with the language of the insurance policy.
[T]he general rule is that an automobile insurance contract should
be interpreted and the rights and liabilities of the parties
thereto determined in accordance with the laws of the state where
the contract was entered even if the liability of the insured arose
out of an accident in North Carolina. Fortune Ins. Co. v. Owens,
351 N.C. 424, 428, 526 S.E.2d 463, 465-66 (2000). Our Supreme
Court recognized an exception to this general rule where a close
connection exists between this State and the interests insured by
an insurance policy. Id. at 428, 526 S.E.2d at 466. However,
the mere presence of the insured interests in this State at the
time of an accident does not constitute a sufficient connection to
warrant application of North Carolina law. Id. In the instant case, we determine that the insurance policy
should be interpreted in accordance with the laws of Georgia. It
is uncontroverted that the policy covered a Georgia vehicle, was
issued to a Georgia resident, and delivered to him at his Georgia
address. Moreover, the insurance policy contained a provision
which states [a]ny disputes as to the coverages provided or the
provisions of this policy shall be governed by the law of the State
of Georgia and our courts typically give effect to choice of law
provisions. Tohato, Inc. v. Pinewild Management, Inc., 128 N.C.
App. 386, 390, 496 S.E.2d 800, 803 (1998).
The Georgia Code requires insurers issuing automobile
liability insurance policies covering vehicles principally garaged
or used in this state to include in their policies a provision
insured to send his insurer, as soon as
practicable after the receipt thereof, a copy
of every summons or other process relating to
the coverage under the policy and to cooperate
otherwise with the insurer in connection with
the defense of any action or threatened action
covered under the policy.
Ga. Code Ann. § 33-7-15(a) (2000). In accordance with this
provision, defendant's policy at issue contained a requirement
stating that [a] person claiming coverage under this policy must:
. . . send [defendant] any and all legal papers relating to any
claim or lawsuit as soon as practicable after receipt[.]
Pursuant to OCGA § 33-7-15(b), a failure to
comply with such a policy provision will, if
prejudicial to the insurer, operate to
'relieve the insurer of its obligation to
defend its insureds under the policy and ofany liability to pay any judgment or other sum
on behalf of its insureds.' (Emphasis
Chadbrooke Ins. Co. v. Fowler, 206 Ga. App. 778, 779, 426 S.E.2d
578, 580 (1992) (citation omitted).
The case of Champion v. Southern General Ins. Co., 198 Ga.
App. 129, 401 S.E.2d 36 (1990), discusses the above-referenced
statutes and involved similar facts to those of the instant case.
In Champion, the plaintiff filed suit against a person insured
under an automobile liability policy issued by Southern General
Insurance Company. Id. at 129, 401 S.E.2d at 37. It was
uncontroverted that Southern General had been notified about the
accident, but Southern General never received any notification
regarding the actual lawsuit. Id. at 129-30, 401 S.E.2d at 37-38.
Southern General did not learn of the action until after final
judgment had been entered on default. Id. at 130, 401 S.E.2d at
38. On those facts, the Georgia Court of Appeals made the
[T]he insurer's introduction of sworn
testimony establishing that the insurer
received no notification of a suit brought
against its insured until after final judgment
had been entered in a default situation is
sufficient to carry the insurer's burden of
showing prejudice under OCGA § 33-7-15(b) so
as to relieve the insurer of its obligations
under the policy to defend the suit and pay
any judgment entered against its insured.
Id. at 132, 401 S.E.2d at 39.
The facts of the instant case are very similar to the facts of
Champion. Here, the affidavit of James A. Dodrill providesevidence that defendant never received any notice of the lawsuit
filed by plaintiff against Nino and Martinez prior to the entry of
default judgment on 4 April 2003. In Champion, the Georgia Court
of Appeals stated:
When the defendant-movant for summary
judgment presents evidence apparently
destroying the plaintiff's cause of action,
the movant has met [its] burden, and the
burden then shifts to the plaintiff to present
any alternative theories, if such exist, which
would support his action and within which
genuine issues of fact remain.
Id. (citation omitted). North Carolina has essentially the same
standard. Ruff v. Reeves Brothers, Inc., 122 N.C. App. 221, 225,
468 S.E.2d 592, 595 (1996) (stating once the moving party has made
and supported its motion for summary judgment, section (e) of Rule
56 provides that the burden is then shifted to the non-moving party
to introduce evidence in opposition to the motion, setting forth
specific facts showing that there is a genuine issue for trial).
Based on our review of the record, there is evidence that
defendant did not receive notice of plaintiff's lawsuit against
Martinez and Nino prior to the entry of the default judgment.
Moreover, plaintiff has not presented any evidence showing there is
a genuine issue for trial. Therefore, defendant was prejudiced and
is entitled to summary judgment and is relieved of its obligations
under the policy to pay the default judgment entered against
Martinez and Nino.
Accordingly, we agree with defendant's contention.
Defendant contends that the trial court erred by failing to
enter summary judgment in favor of defendant. We have already
discussed this issue in part I above. Therefore, the trial court
erred in granting plaintiff's motion for summary judgment and
denying defendant's motion for summary judgment. The judgment of
the trial court is reversed and this case is remanded for the entry
of summary judgment in favor of defendant.
Reversed and remanded.
Chief Judge MARTIN and Judge ELMORE concur.
Report per Rule 30(e).
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