Nationwide Prop. & Cas. Ins. Co. v. SmithÂ
256 N.C. App. 492
| N.C. Ct. App. | 2017Background
- George and Sharon Olsen held an underinsured motorist (UIM) policy with Nationwide.
- Mr. Olsen was struck by a car driven by Skylar Wellington, who tested .15 BAC hours after the crash.
- Plaintiffs sued Wellington and Nationwide; Nationwide filed a third-party complaint seeking contribution from Timothy W. Smith and Timothy R. Smith, alleging they negligently served Wellington alcohol.
- Wellington’s liability carrier paid policy limits and obtained a covenant not to execute; Plaintiffs then settled with Nationwide for $850,000 and dismissed their claims with prejudice.
- The only remaining claim was Nationwide’s contribution claim against the Smiths; the Smiths moved to dismiss under Rule 12(b)(6).
- The trial court dismissed Nationwide’s third-party complaint for failure to state a claim; Nationwide appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an underinsured motorist insurer may seek contribution from third-party tortfeasors | Nationwide: It can obtain contribution because the Smiths and Wellington share common liability for Plaintiffs’ injuries | Smiths: Contribution is available only among tortfeasors; Nationwide (as UIM insurer) is not a tortfeasor and thus lacks standing to claim contribution | The court affirmed dismissal: an underinsured carrier is not a tortfeasor and may not seek contribution under N.C. law |
Key Cases Cited
- Lynn v. Overlook Dev., 328 N.C. 689 (1991) (standard for Rule 12(b)(6) dismissal)
- Wray v. City of Greensboro, 802 S.E.2d 894 (2017) (de novo review of Rule 12(b)(6) dismissal)
- Johnson v. Hudson, 122 N.C. App. 188 (1996) (underinsured carrier is not a tortfeasor and cannot assert contribution)
- McCrary v. Byrd, 148 N.C. App. 630 (2002) (reaffirming that an underinsurance carrier has no right to contribution)