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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.
SUZANNE PAIGE KESSLER, Plaintiff, v. DAVID SCOTT SHIMP, GRADUATE
LAKE NORMAN, INC., CHARLOTTE RESTAURANT CREATIONS, LLC, FIREFLY
FIVE, INC., and MICHAEL TERRENCE LEON LASCHINSKI, Defendants, and
ERIE INSURANCE EXCHANGE, Unnamed Defendant
Filed: 20 February 2007
Insurance_automobile--setoff_medical payments from UIM coverage_express terms of
The trial court correctly granted summary judgment for defendant automobile insurer in
an automobile accident case where plaintiff argued that the amount paid to plaintiff under the
medical payments part of the insurance policy was improperly set off from the amount due under
the UIM portion of the policy. Defendant acted properly under the express terms of the policy.
Appeal by plaintiff from order entered 15 March 2006 by Judge
Robert C. Ervin in Mecklenburg County Superior Court. Heard in the
Court of Appeals 24 January 2007.
Katherine Freeman and Klein & Freeman, PLLC, by Paul I. Klein,
No brief filed for defendants-appellees David Scott Shimp,
Graduate Lake Norman, Inc., Charlotte Restaurant Creations,
LLC, Firefly Five, Inc., and Michael Terrence Leon Laschinski.
Dean & Gibson L.L.P., by Thomas G. Nance, for unnamed
Suzanne Paige Kessler (plaintiff) appeals from order entered
granting summary judgment in favor of unnamed defendant Erie
Insurance Exchange (defendant) and denying plaintiff's motion for
summary judgment. We affirm.
On 4 April 2004, plaintiff suffered severe bodily injuries
during an automobile accident allegedly caused by defendant DavidScott Shimp. Plaintiff's passengers, Anna Grace Jordan and Sally
Mackenzie Clark, were killed in the accident. At the time of the
accident, plaintiff was operating her grandfather's, Francis Edward
Allen (Allen), automobile. Defendant insured Allen's vehicle.
Defendant's policy provided $100,000.00 per injured person in
underinsured motorists' (UIM) coverage and $2,000.00 per injured
person in medical payments coverage. Defendant David Scott Shimp
was insured by State Farm Mutual Insurance Company (State Farm).
State Farm provided liability coverage of $30,000.00 per injured
person, or $60,000.00 in the aggregate.
It is undisputed that: (1) defendant's insurance policy
covered plaintiff; (2) defendant's policy provided UIM coverage in
the amount of $100,000.00 per injured person and medical payments
coverage in the amount of $2,000.00 per injured person; (3) State
Farm paid plaintiff $20,000.00; (4) defendant is entitled to reduce
its UIM limit of liability by $20,000.00, the amount paid by State
Farm, to $80,000.00; and (5) defendant has paid plaintiff
$78,000.00 under the UIM portion of its policy and $2,000.00 under
the medical payments portion of its policy.
On 12 October 2005, plaintiff filed suit claiming she was owed
an additional $2,000.00 of UIM coverage and for attorney's fees
pursuant to N.C. Gen. Stat. § 6-21.1. On 20 December 2005,
defendant moved for summary judgment and asserted:
[T]he total amount of [UIM] benefits available
to the Plaintiff in this case is $78,000.00,
after a reduction for applicable liability
insurance limits and a reduction for payments
made to Plaintiff under the medical payments
coverage portion of [defendant's] insurancepolicy. [Defendant] contends that as a matter
of law, it has tendered all available [UIM]
proceeds to the Plaintiff and is not obligated
to provide any additional coverage or monies
On 17 January 2006, plaintiff cross-motioned for summary judgment.
Plaintiff asserted she was entitled as a matter of law to the
limits of the UIM policy or $80,000.00 in addition to the $2,000.00
On 15 March 2006, the trial court granted defendant's motion
for summary judgment and denied plaintiff's motion for summary
judgment. Plaintiff appeals.
Plaintiff argues the trial court erred by granting defendant's
motion for summary judgment and denying her motion for summary
III. Standard of Review
Our Supreme Court has stated:
Summary judgment is appropriate 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 [a] party is entitled
to a judgment as a matter of law. On appeal
of a trial court's allowance of a motion for
summary judgment, we consider whether, on the
basis of materials supplied to the trial
court, there was a genuine issue of material
fact and whether the moving party is entitled
to judgment as a matter of law. Evidence
presented by the parties is viewed in the
light most favorable to the non-movant.
Summey v. Barker, 357 N.C. 492, 496, 586 S.E.2d 247, 249 (2003)
(internal quotations and citation omitted). Here, [t]he parties conceded there is no question of material
fact by submitting cross-motions for summary judgment. Erie Ins.
Exch. v. St. Stephen's Episcopal Church, 153 N.C. App. 709, 711,
570 S.E.2d 763, 765 (2002). The question before us is whether
either party is entitled to judgment as a matter of law. See id.
at 716, 570 S.E.2d at 768 (reversing the trial court's order that
granted summary judgment for the defendant and remanding for entry
of an order granting summary judgment for the plaintiff).
IV. Summary Judgment
Plaintiff asserts the trial court erred in construing
defendant's insurance policy. Plaintiff argues summary judgment in
favor of defendant was error because: (1) there was no potential
duplication of payment because her damages exceeded all coverages
available and (2) the language of the insurance contract is vague
and must be construed against defendant and in favor of coverage.
Plaintiff argues summary judgment in favor of defendant should be
reversed and the case remanded for entry of summary judgment in
favor of plaintiff. We disagree.
The construction and interpretation of provisions in an
insurance contract is a question of law. See Shelton v. Duke Univ.
Health Sys., 179 N.C. App. 120, 123, 633 S.E.2d 113, 115 (2006)
(Contract interpretation is a matter of law, and the standard of
review for this Court is de novo. (internal citation omitted)
Our Supreme Court has stated:
[A]n insurance policy is a contract and its
provisions govern the rights and duties of the
parties thereto. . . . [T]he intention of the parties controls any
interpretation or construction of the
contract, and intention must be derived from
the language employed. This Court has long
recognized its duty to construe and enforce
insurance policies as written, without
rewriting the contract or disregarding the
express language used. The duty is a solemn
one, for it seeks to preserve the fundamental
right of freedom of contract. Only when the
contract is ambiguous does strict construction
Fidelity Bankers Life Ins. Co. v. Dortch, 318 N.C. 378, 380-81, 348
S.E.2d 794, 796 (1986) (internal citations omitted) (emphasis
This Court stated:
When reviewing an insurance policy, this Court
must examine the contract as a whole and
effectuate the intent of the parties. Any
question as to the meaning of the language
used in a policy is a question of law for the
court to resolve.
Because the intention of the parties is
paramount, the court must use definitions
contained in the policy to determine the
meaning of words or phrases detailing the
scope of coverage. In the absence of policy
definitions, the court must define a term or
phrase consistent with the context in which it
is used and the meaning accorded it in
ordinary speech. In doing so, courts are
encouraged to use standard, nonlegal
dictionaries as a guide.
Any ambiguities, however, as to the definition
of policy terms or the scope of coverage are
to be resolved in favor of coverage. This is
because the insurance company prepared the
policy and chose the language contained
therein. An ambiguity exists when the
language used in the policy is susceptible to
different, and perhaps conflicting,
interpretations. However, the aforementioned
rules of construction cannot be used to
rewrite an unambiguous policy[.]McLeod v. Nationwide Mutual Ins. Co., 115 N.C. App. 283, 289-90,
444 S.E.2d 487, 491-92 (internal citations and quotations omitted),
disc. rev. denied, 337 N.C. 694, 448 S.E.2d 528 (1994).
Plaintiff concedes: (1) the medical payments coverage is not
statutorily mandated; (2) the medical payments coverage is not
discussed in N.C. Gen. Stat. § 20-279.1, et seq., the Financial
Responsibility Act; and (3) in the absence of an applicable
provision in the Financial Responsibility Act, an insurer's
liability is measured by the terms of the policy as written.
Plaintiff argues defendant improperly set off from the amount
due to her under the UIM portion of the insurance contract the
$2,000.00 previously paid to plaintiff under the Part B medical
payments portion of its policy.
Part C2 of the insurance contract at issue here sets forth the
terms and limits of UIM coverage provided to plaintiff. The policy
expressly provides in the limit of liability subsection to part C2:
This coverage is excess over and shall not duplicate any amount
paid or payable under Part B. (emphasis supplied). Part B of the
policy is entitled Medical Payments Coverage and sets forth the
terms of medical payments coverage.
After subtracting State Farm's payment, it is undisputed that
defendants' limit of UIM liability to plaintiff is $80,000.00.
Defendant paid plaintiff $78,000.00 under the UIM portion of its
policy after crediting and setting off $2,000.00 defendant had
previously paid to plaintiff under the Part B medical payments
portion of its policy. Pursuant to the express terms of theinsurance policy that covered defendant's UIM liability to
plaintiff, defendant properly took credit and setoff for the
$2,000.00 it had previously paid to plaintiff under the medical
payments portion of its policy. See Espino v. Allstate Indem. Co.,
159 N.C. App. 686, 690, 583 S.E.2d 376, 379 (2003) (Where the
express language in the plaintiff's insurance policy stated that UM
coverage was in excess of and shall not duplicate payments made
under the medical payments coverage, the defendant was entitled to
a credit and setoff for the $1,000.00 it previously paid the
plaintiff in medical expenses.). This assignment of error is
Pursuant to the express terms of defendant's insurance policy,
defendant properly credited and setoff the $2,000.00 it had
previously paid to plaintiff under the medical payments portion of
its policy against the $80,000.00 due
plaintiff for UIM coverage.
159 N.C. App. at 690, 583 S.E.2d at 379.
satisfied all of its coverage obligations under the insurance
policy to plaintiff. Defendant was entitled to judgment as a
matter of law. The trial court's order granting defendant's motion
for summary judgment and denying plaintiff's motion for summary
judgment is affirmed.
Judges STEPHENS and STROUD concur.
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