Court Opinion

ID: 6715013
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:45:18.951968+00
Date Added: 2024-06-11T16:01:31.001517
License: Public Domain

Justice Frye
dissenting.
In this case, the majority concludes that because the commercial excess liability policy in question is not a “motor vehicle liability policy” as defined by N.C.G.S. § 20-279.21(a), it is not required to offer the insured uninsured motorist (UM) and underinsured motorist (UIM) coverage pursuant to N.C.G.S. § 20-279.21(b)(3) and (b)(4). I respectfully dissent from the majority’s decision on this issue.
Once again this Court is called upon to interpret a complex and difficult statute, N.C.G.S. § 20-279.21 (Supp. 1998). We must decide whether, in this case, the statute requires the insurer to provide UIM coverage under subdivision (b)(4) of the statute. However, in order to do so, we must first determine whether the policy at issue was *398required to provide UM coverage, because N.C.G.S. § 20-279.21(b)(4) requires that policies insuring automobile liability that are written at limits exceeding the minimum statutory liability limits and that afford UM coverage must provide UIM coverage unless rejected by a named insured. See Sutton v. Aetna Cas. & Sur. Co., 325 N.C. 259, 263, 382 S.E.2d 759, 762 (1989).
Effective 14 August 1997, the General Assembly amended chapter 58 of the North Carolina General Statutes to permit insurers to limit or exclude UM and UIM coverage with respect to insurance policies providing excess liability coverage. See N.C.G.S. § 58-3-152 (Supp. 1998). Thus, the issue presented by this case is whether a commercial excess liability policy, which covers bodily injury arising out of the ownership, maintenance, or use of a motor vehicle, issued prior to the effective date of N.C.G.S. § 58-3-152, provides UIM coverage despite the policy’s silence as to such coverage. While the majority has set forth one reasonable interpretation of N.C.G.S. § 20-279.21, it is not writing on a clean slate. This Court has already spoken to the interpretation of N.C.G.S. § 20-279.21(b)(3) and (b)(4) on a closely related, if not identical, issue. I would hold that our interpretation of N.C.G.S. § 20-279.21(b)(4) articulated in Isenhour v. Universal Underwriters Ins. Co., 341 N.C. 597, 461 S.E.2d 317 (1995), controls this question and that the commercial excess liability policy at issue in this case does provide UIM coverage.
In Isenhour v. Universal Underwriters Ins. Co., we addressed the question whether a multiple-coverage fleet insurance policy that included umbrella coverage was required to offer UIM coverage equal to the liability limits under its umbrella coverage section. Id. In a unanimous decision, we held that, under the version of N.C.G.S. § 20-279.21(b) applicable at that time, the insurer was required to offer the insured UIM coverage in an amount equal to the automobile bodily injury coverage provided in the umbrella coverage section of the policy. Id. at 605, 461 S.E.2d at 322.
In reaching that conclusion in Isenhour, we examined the conditions under which a policyholder is entitled to UIM coverage. We first noted the analysis of the decision of Krstich v. United Servs. Auto. Ass’n, 776 F. Supp. 1225 (N.D. Ohio 1991), which determined that “ ‘a “policy of bodily injury liability insurance” which covers “liability arising out of the ownership, maintenance, or use” of a motor vehicle’ ” must provide UM coverage. Isenhour, 341 N.C. at 604, 461 S.E.2d at 321 (quoting Krstich, 776 F. Supp. at 1234 (applying North *399Carolina law)). Pursuant to N.C.G.S. § 20-279.21(b)(4), such a policy must provide UIM coverage if the policyholder has elected liability coverage above the statutory minimums. See id.-, see also Sutton, 325 N.C. at 263, 382 S.E.2d at 762. In addition, the policyholder must not have executed a rejection of UIM coverage. Isenhour, 341 N.C. at 605, 461 S.E.2d at 322; see also N.C.G.S. § 20-279.21(b)(4). Because the statutory prerequisites were met, we held that the defendant-insurer in Isenhour was required to have offered the insured UIM coverage under the umbrella coverage section of the fleet policy in an amount equal to the limit of automobile bodily injury liability coverage provided by the insured’s umbrella coverage.
The rationale of Isenhour is that subdivision (b)(3) requires an excess liability policy to provide UM coverage and that, when read together, subdivisions (b)(3) and (b)(4) mandate UIM coverage. While the umbrella coverage at issue in Isenhour was part of a multicoverage policy, we adopted the rationale of Krstich, a case which very clearly involved separate underlying and excess insurance policies, as a basis for our decision. As noted by the majority, Krstich is a federal case decided under Ohio law and thus not binding on this Court; however, the Krstich court said that the result would be the same under both the Ohio statute and the North Carolina statute. This Court did not reject that assertion in Isenhour and thus approved an interpretation of N.C.G.S. § 20-279.21(b)(3) and (b)(4) that would require policies of bodily injury liability insurance which cover liability arising out of the ownership, maintenance, or use of a motor vehicle to provide UM coverage and UIM coverage if the other statutory prerequisites are met. Our analysis in Isenhour was not dependent upon the policy satisfying the definition of “motor vehicle liability policy” contained in N.C.G.S. § 20-279.21(a).
In Isenhour, this Court gave an interpretation to N.C.G.S. § 20-279.21(b)(3) and (b)(4) that, if followed in this case, would require an excess liability policy to provide UIM coverage. The General Assembly has not rejected the interpretation given to N.C.G.S. § 20-279.21(b)(3) and (b)(4) in the Isenhour decision. Instead, the General Assembly amended chapter 58 of the North Carolina General Statutes, effective 14 August 1997, so as to permit insurers “to limit or exclude UM and UIM coverage with respect to insurance policies providing excess liability coverage.” N.C.G.S. § 58-3-152. However, the enactment of N.C.G.S. § 58-3-152 did not affect the interpretation of N.C.G.S. § 20-279.21(b)(3) and (b)(4) adopted in Isenhour.
*400Finally, and perhaps most important, the interpretation of N.C.G.S. § 20-279.21(b)(4) given in Isenhour fulfills the “avowed purpose of the Financial Responsibility Act, of which N.C.G.S. § 20-279.21(b)(4) is a part, [which] is to compensate the innocent victims of financially irresponsible motorists.” Sutton, 325 N.C. at 265, 382 S.E.2d at 763. The majority’s construction ignores our longstanding tenet that, as a remedial statute, the provisions of N.C.G.S. § 20-279.21(b)(4) should be “liberally construed so that the beneficial purpose intended by its enactment may be accomplished.” Id.
The umbrella policy issued by Aetna in this case provides bodily injury liability insurance covering liability arising out of the ownership, maintenance, or use of a motor vehicle. Therefore, pursuant to N.C.G.S. § 20-279.21(b)(3) as interpreted by Isenhour, the excess liability policy would be required to provide UM coverage, and under the precedent of Isenhour, I would hold that the policy must also provide UIM coverage pursuant to N.C.G.S. § 20-279.21(b)(4).
Justice Martin joins in this dissenting opinion.