Lunsford v. Mills
766 S.E.2d 297
N.C.2014Background
- Accident involved Mills (tractor-trailer) and Buchanan, with Mills/Crowder insured for $1,000,000 and Buchanan for $50,000 liability; Lunsford sued Mills, Crowder, and Buchanan jointly and severally.
- Lunsford carried two UIM policies with Farm Bureau totaling $400,000; settlements with Buchanan ($50,000) and Mills/Crowder ($850,000) followed.
- Farm Bureau, an unnamed defendant, argued it need not provide UIM benefits until all defendants’ liability policies were exhausted.
- Allstate tendered Buchanan’s liability limits ($50,000); Farm Bureau declined to advance UIM initially and later faced a summary judgment award.
- Trial court granted summary judgment for Lunsford for $350,000 UIM benefits, plus later interest and costs.
- Court of Appeals affirmed the UIM trigger but affirmed the trial court’s interest/costs award; this Court granted review on both issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does UIM coverage attach in a multi-tortfeasor case? | Lunsford argues exhaustion of a single at-fault driver suffices. | Farm Bureau contends exhaustion of all liable policies is required. | UIM activation occurs after exhaustion of a single at-fault vehicle’s liability policy. |
| Whether pre- and post-judgment interest and costs may exceed UIM policy limits | Lunsford seeks interest/costs beyond policy limits. | Farm Bureau contends interest/costs follow policy terms, not exceeding limits. | Interest and costs may not exceed the UIM policy limits; affirmed in part, reversed in part. |
Key Cases Cited
- Baxley v. Nationwide Mut. Ins. Co., 334 N.C. 1 (N.C. 1993) (interest governed by policy terms; Baxley cap on damages applies)
- Sproles v. Greene, 329 N.C. 603 (N.C. 1992) (policy terms govern post-judgment interest; not in excess of limits)
- Proctor v. N.C. Farm Bureau Mut. Ins. Co., 324 N.C. 221 (N.C. 1989) (remedial interpretation to protect innocent victims; liberal construction)
- Haight v. Nationwide Mut. Ins. Co., 152 N.C. App. 137 (N.C. Ct. App. 2002) (UIM purpose to place insured in position as if tortfeasor had equal limits)
- Sutton v. Aetna Cas. & Sur. Co., 325 N.C. 259 (N.C. 1989) (origin of UM/UIM statute and purpose; stacking context)