Unnamed Defendant North Carolina Farm Bureau Mutual Insurance Company (Farm Bureau) appeals from the trial court’s order granting summary judgment in favor of Douglas Kirk Lunsford (Plaintiff). We affirm.
I. Factual & Procedural Background
This appeal, arises from a dispute between Farm Bureau and its insured, Plaintiff, concerning underinsured motorist (UIM) coverage in connection with two motor vehicle accidents that occurred on Interstate 40 in McDowell County on 18 September 2009. The first accident occurred when Defendant Thomas E. Mills lost control of his tractor trailer while traveling in the eastbound lane of Interstate 40, causing the vehicle to flip. At the time of this accident, Mr. Mills was acting within the scope of his employment with Defendant James Crowder.
Plaintiff, a volunteer firefighter with the Crooked Creek Fire Department, was the first to respond to the scene and parked his vehicle on the right shoulder of the westbound travel lane. Plaintiff crossed the freeway on foot to assist Mr. Mills and determined that “[Mr.] Mills was injured and that diesel fuel was leaking from” the tractor trailer. As Plaintiff attempted to carry Mr. Mills “over the concrete median [and]... across the westbound lanes of 1-40 to safety, to perform an assessment of [Mr. Mills’] injuries,” the second accident occurred when another motorist, Defendant Shawn T. Buchanan, who was traveling in the westbound lane, “was not paying attention to traffic in front of him which had slowed due to the wrecked tractor-trailer, nearly rear-ended a vehicle
At the time of these accidents, Mr. Mills and his employer, Mr. Crowder, were insured under a policy written by United States Fire Insurance Company (US Fire) providing liability coverage limits of $1 million. Mr. Buchanan was insured under a policy written by Allstate Insurance Company (Allstate) providing liability coverage limits of $50,000.00. Plaintiff held two insurance policies with Farm Bureau: (1) a business automobile policy with UIM coverage limits of $300,000.00; and (2) apersonal automobile policy with UIM coverage limits of $100,000.00.
On 14 February 2011, Plaintiff filed a complaint in McDowell County Superior Court asserting negligence claims against the named Defendants and alleging that Defendants were jointly and severally liable for his injuries. All Defendants filed answers, and Defendants Buchanan and Crowder asserted crossclaims against one another seeking indemnification and contribution. In addition, Farm Bureau, which had not been named as a party in the action, filed an answer asserting that it was entitled to an offset with respect to Plaintiff’s UIM policies for any damages recovered by Plaintiff through insurance policies held by the named Defendants.
On 24 May 2011, Allstate tendered to Plaintiff the $50,000.00 coverage limit for Buchanan’s policy. The following day, counsel for Plaintiff notified Farm Bureau of Allstate’s tender and demanded that Farm Bureau tender payment for Plaintiff’s UIM claim. By letter dated 7 June 2011, Farm Bureau responded that it would “not advance the liability policy limits tendered to [Plaintiff] by Allstate” and that “[a]s for the demand for our [UIM] policy limits, we are currently reviewing the situation with counsel based on the apparent existence of other potential recoverable liability insurance policies and will respond to your demand at a later date.” More than six months later, Farm Bureau still had not provided UIM coverage to Plaintiff when Plaintiff settled his claims against Mr. Mills and Mr. Crowder for $850,000.00, which was paid under their policy with US Fire. On 12 January 2012, an order was entered in McDowell County Superior Court approving the settlement of Plaintiff’s claims against Defendants Buchanan, Mills, and Crowder; and, accordingly, all claims and crossclaims filed in Plaintiff’s original action were dismissed with prejudice.
Farm Bureau, however, never tendered any monies to Plaintiff under Plaintiff’s UIM policies. Instead, on 19 July 2012, Farm Bureau
The matter of Farm Bureau’s motion for summary judgment and Plaintiff’s cross motion for summary judgment came on for hearing in McDowell County Superior Court on 15 October 2012. By order filed 13 November 2012, the trial court granted Plaintiffs motion for summary judgment, denied Farm Bureau’s motion for summary judgment, and entered judgment in Plaintiff’s favor and against Farm Bureau in the amount of $350,000.00, plus costs and pre and post-judgment interest. Farm Bureau appeals.
II. Analysis
This appeal raises the question of when UIM coverage is triggered in instances in which the insured is injured in a motor vehicle accident caused by multiple tortfeasors. More specifically, we must determine whether Farm Bureau was obligated to provide UIM coverage to Plaintiff once Allstate had tendered its policy limits to Plaintiff on behalf of Mr. Buchanan, or, whether Farm Bureau was entitled to withhold coverage until Plaintiff had recovered (or attempted to recover) under the liability policies insuring the tractor trailer driven by Mr. Mills.
Farm Bureau argues that it was not required to provide coverage until all applicable policies - meaning all policies held by all the named Defendants - had been exhausted; that Plaintiff settled his claims against the named Defendants for a total of $900,000.00, an amount that far exceeded Plaintiffs total UIM coverage limits of $400,000.00; and that permitting Plaintiff to recover UIM coverage of $350,000.00 in addition to the $900,000.00 he had already received from the tortfeasors provided Plaintiff with a windfall.
Plaintiff counters that his $50,000.00 settlement with Allstate on behalf of Mr. Buchanan triggered Farm Bureau’s obligation to provide UIM coverage in the amount of $350,000.00, the amount by which Plaintiff’s $400,000.00 UIM coverage with Farm Bureau exceeded the settlement. Plaintiff argues that Farm Bureau could have recouped
“[T]he governing statute [concerning UIM coverage] is the version of N.C. Gen. Stat. § 20-279.21(b)(4) in effect at the time the policy was issued.” Vasseur v. St. Paul Mut. Ins. Co.,
Underinsured motorist coverage is deemed to apply when, by reason of payment of judgment or settlement, all liability bonds or insurance policies providing coverage for bodily injury caused by the ownership, maintenance, or use of the underinsured highway vehicle have been exhausted.
N.C. Gen. Stat. § 20-279.21(b)(4) (2011) (emphasis added). This provision also defines an “underinsured highway vehicle” as follows:
[A]n “underinsured highway vehicle[”] means 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.
Id. As discussed below, we interpret the plain language of this provision to mean that UIM coverage is triggered the moment that an insured has recovered under all policies applicable to “a” - meaning one - “underinsured highway vehicle” involved in a motor vehicle accident resulting in injury to the insured.
We note that neither Plaintiff nor Farm Bureau offers any North Carolina case law addressing the rights and obligations of a UIM insurer in a situation involving liability policies covering multiple vehicles that
The UIM carrier pays out what it owes its insured after judgment or settlement has been reached with the under-insured driver. If there are parties that exist that may be made “legally responsible” through proper court channels, the UIM insurer may pursue them via their subrogation rights. As it happened here, such an offer was made, but refused by the insured. As the structure of the Act and definition of exhaustion provide, a UIM carrier cannot require an insured to pursue these parties before exhaustion can occur. Recovered proceeds from legally responsible parties can only flow back to the UIM carrier after the fact. There is no entitlement or subrogation by the UIM carrier to those proceeds unless payment to the insured was made when the underinsured vehicle’s limits were exhausted, or otherwise in accordance with the Act. Money paid out by UIM insurer is to be recouped, not reduced then paid out. The fear... that insureds will be kept hanging in limbo as they are forced to sue any and all possible persons or organizations for years before they could recover their UIM*30 benefits are [sic] unfounded. Such actions on the part of UIM carriers would be in the realm of bad faith.
Id. at 373,
We see no reason why the rights and obligations of a UIM insurer should differ in the present case simply because the additional tortfeasor was a motorist covered under an automobile liability policy. In other words, we see no reason why insureds should “be kept hanging in limbo as they are forced to sue any and all possible persons . . . before they could recover UIM benefits” just because other potential tortfeasors also happen to be covered under automobile policies.
Finally, Farm Bureau contends that the trial court erred in awarding Plaintiff costs and pre and post-judgment interest “as provided by law.” Farm Bureau cites Sproles v. Greene,
III. Conclusion
For the foregoing reasons, the trial court’s 13 November 2012 order is hereby
AFFIRMED.
Notes
. We note that decisions of courts in other jurisdictions are in accord with our holding. See, e.g., Gen. Acc. Ins. Co. v. Wheeler,