ELIZABETH MCDOWELL and
DAVID ANDY JONES, by and
through his Guardian Ad
Litem, ELIZABETH MCDOWELL,
No. 05 CVS 04025
STATE FARM MUTUAL
AUTOMOBILE INSURANCE CO.,
Clayton, Myrick, McClanahan & Coulter, PLLC, by Robert D.
McClanahan, for Plaintiffs-Appellees.
Law Offices of Douglas F. DeBank, by Douglas F. DeBank, for Defendant-Appellant.
Defendant appeals from a 7 March 2006 order, entered by the Honorable Abraham Penn Jones in Durham County Superior Court, granting Plaintiffs' motion for summary judgment and entering declaratory judgment in favor of Plaintiffs, determining that Plaintiffs are entitled to underinsured motorist (UIM) coverage under a policy issued by Defendant. For the reasons stated herein, we hold that the trial court erred and therefore reverse the court's order. The relevant facts are as follows: On 25 May 2003, Plaintiffs, Elizabeth McDowell (Elizabeth) and David Andy Jones (David), suffered personal injuries while passengers in a 1993 Geo Prism automobile owned by Elizabeth and being driven by Kenneth McDowell (Kenneth), Elizabeth's husband, who was also injured. Plaintiffs' injuries were sustained when a 1995 Ford automobile, driven by Landrum Alex Gentry, III (Gentry), failed to stop at a stop sign and struck the McDowells' vehicle. At the time of the collision, the vehicle driven by Gentry was insured by Travelers Insurance Company (Travelers), and Elizabeth held an automobile insurance policy on the Geo Prism issued by Defendant.
Through three SETTLEMENT AGREEMENT[S] AND COVENANT[S] NOT TO ENFORCE JUDGMENT[,] signed 22 March 2005, Travelers tendered its applicable policy limits to Elizabeth, Kenneth and David, and was thereby released from any further liability resulting from the automobile accident. Specifically, Travelers paid (1) Kenneth personal injury damages in the amount of $263,234.11, (2) Elizabeth personal injury damages in the amount of $31,017.57 and property damages in the amount of $3,465.00, and (3) David personal injury damages in the amount of $2,283.32. By reason of these settlements, Travelers exhausted its $300,000 single limits liability coverage.
On 8 August 2005, Plaintiffs filed an action against Defendant claiming they were entitled to additional compensation for their injuries pursuant to the UIM provisions contained in Elizabeth's automobile insurance policy with Defendant. That policy providedUIM coverage in the maximum amount of $100,000 per person and $300,000 per accident. On 21 December 2005, Plaintiffs filed a motion for summary judgment, asking the trial court to declare the total amount of UIM coverage available to Plaintiffs for the injuries suffered in the 25 May 2003 accident. On 7 March 2006, the trial court entered an order granting Plaintiffs' motion for summary judgment and declaratory relief.
Summary judgment is proper 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) (2005). When reviewing the trial court's grant of summary judgment, our standard of review is de novo, and we view all evidence in the light most favorable to the non-moving party. Stafford v. County of Bladen, 163 N.C. App. 149, 592 S.E.2d 711, appeal dismissed and disc. review denied, 358 N.C. 545, 599 S.E.2d 409 (2004).
Defendant contends that the trial court erred in granting Plaintiffs' motion for summary judgment and by declaring that Plaintiffs are entitled to UIM coverage. Specifically, Defendant argues that UIM coverage was not available under the policy issued by Defendant because, at the time of the accident, the negligent driver's vehicle was not an underinsured highway vehicle as defined by North Carolina law and not an underinsured motor vehicle as defined by Elizabeth's policy. We agree. In order to bring a successful UIM claim, a plaintiff must first establish that (1) the negligent driver's automobile was an 'underinsured highway vehicle'; and (2) the negligent driver's liability coverage has been exhausted. North Carolina Farm Bureau Mut. Ins. Co. v. Gurley, 139 N.C. App. 178, 180, 532 S.E.2d 846, 848 (citing N.C. Gen. Stat. § 20-279.21(b)(4) (1999)), disc. review denied, 352 N.C. 675, 545 S.E.2d 427 (2000). To determine if the negligent driver's vehicle was an underinsured highway vehicle, we must look to the Motor Vehicle and Financial Responsibility Act of 1953 (the Act) as it defined an underinsured highway vehicle on 25 May 2003. At that time, the Act defined an underinsured highway vehicle as
a highway vehicle with respect to the ownership, maintenance, or use of which, the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of underinsured motorist coverage for the vehicle involved in the accident and insured under the owner's policy.
N.C. Gen. Stat. § 20-279.21(b)(4) (2003) (emphasis added). To determine if UIM coverage applies, [t]he respective liability and UIM limits are . . . directly compared to each other. Gurley, 139 N.C. App. at 180, 532 S.E.2d at 848.
In the case sub judice, the Travelers policy which insured the vehicle that Gentry was operating provided $300,000 in single limits liability coverage. Therefore, primary liability coverage was available up to a maximum of $300,000 per person and $300,000 per accident. Thus, a total of $300,000 was available whether onlyone person asserted a claim or multiple claims arose out of the same accident. When compared directly to Elizabeth's UIM coverage of $100,000 per person and $300,000 per accident, it is clear that Gentry's coverage was greater than or equal to the coverage provided to Elizabeth by Defendant. That is, Gentry's $300,000 per person coverage is greater than Elizabeth's $100,000 per person coverage, and Gentry's $300,000 per accident coverage is equal to Elizabeth's $300,000 per accident coverage. Therefore, it follows that the negligent driver's automobile was not an underinsured highway vehicle under the applicable statute. Accordingly, the UIM coverage that Elizabeth held, pursuant to her policy with Defendant, does not provide coverage for this accident.
Moreover, we note that Elizabeth's automobile insurance policy with Defendant defines underinsured motor vehicle in the same manner in which an underinsured highway vehicle is defined by statute. Therefore, under the UIM policy terms as well, Gentry's vehicle was not underinsured, and UIM coverage was thus not available.
For the reasons stated, we hold that Plaintiffs were not entitled to UIM coverage and that the trial court erred in granting summary judgment and entering declaratory judgment in favor of Plaintiffs. The order of the trial court is therefore
Judges STEELMAN and GEER concur.
Report per Rule 30(e).
The judges concurred and submitted this opinion for filing
prior to 31 December 2006.
*** Converted from WordPerfect ***