Court Opinion

ID: 9848575
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:22:46.383658+00
Date Added: 2024-06-11T09:18:25.524499
License: Public Domain

MCCULLOUGH, Judge,
dissenting:
The majority holds that cargo which strikes another vehicle after falling off a hit-and-run vehicle does not satisfy North Carolina’s physical contact rule. As I believe there is no functional difference between a vehicle and its cargo, I would reverse the trial court and hold that when cargo falls from a vehicle striking another automobile, the physical contact rule is satisfied.
Here, plaintiff filed suit after defendant insurer declined arbitration on the basis that a collision with a vehicle’s cargo (a log) does not constitute a collision with the hit-and-run vehicle itself. The trial court dismissed plaintiff’s suit pursuant to Rule 12(b)(6) of the N.C. Rules of Civil Procedure.
Rulings made pursuant to Rule 12(b)(6) are reviewed de novo by this Court with the complaint’s factual allegations treated as being true. Burgin v. Owen, 181 N.C. App. 511, 512, 640 S.E.2d 427, 428, cert. denied, 361 N.C. 690, 652 S.E.2d 257 (2007).
The policy issued by Nationwide provides uninsured motorist coverage using the following language:
Insuring Agreement
We will pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of:
1. Bodily injury sustained by an insured and caused by an accident; ...
* * * *
The owner’s or operator’s liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle.
* * * *
*112“Uninsured motor vehicle” means a land motor vehicle or trailer of any type:
1. To which neither:
a. a liability bond or policy; nor
b. cash or securities on file with the North Carolina Commissioner of Motor Vehicles; applies at the time of the accident.
2. To which a liability bond or policy applies at the time of the accident; provided its limit for liability is less than the minimum limit specified by the financial responsibility law of North Carolina.
3. Which, with respect to damages for bodily injury only, is a hit-and-run vehicle whose operator or owner cannot be identified and which hits:
a. you or any family member;
b. a vehicle which you or any family member are occupying; or
c. your covered auto.
4. To which a liability bond or policy applies at the time of the accident but the bonding or insuring company:
a. denies coverage; or
b. is or becomes insolvent.
The statute mandating UM coverage provides:
No policy . . . shall be . . . issued ... in this state . . . unless coverage is provided therein... for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles ....
* * * *
In addition to the above requirements relating to uninsured motorist insurance, every policy . . . shall be subject to the following provisions which need not be contained therein.
a. A provision that the insured shall be bound by a final judg- • ment taken by the insured against an uninsured motorist if *113the insurer has been served with a copy of summons, complaint or other process in the action against the uninsured motorist.... The insurer, upon being served as herein provided, shall be a party to the action between the insured and the uninsured motorist though not named in the caption of the pleadings and may defend the suit in the name of the uninsured motorist or in its own name. . . .
b. Where the insured, under the uninsured motorist coverage, claims that he has sustained bodily injury as the result of collision between motor vehicles and asserts that the identity of the operator or owner of a vehicle (other than a vehicle in which the insured is a passenger) cannot be ascertained, the insured may institute an action directly against the insurer; provided, in that event, the insured [shall report the accident to a law enforcement officer and give the UM insurer notice of the accident as well].
N.C. Gen. Stat. § 20-279.21(b)(3) (2007).
Determining the meaning of language used in an insurance policy is a question of law that this Court determines de novo with any ambiguity resolved in favor of the policyholder as the insurer drafted the policy. Trust Co. v. Insurance Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970).
Plaintiff contends that suit is authorized pursuant to paragraph 3 of the policy, as this paragraph covers a hit-and-run vehicle such as in the case at bar, while the insurer argues that there is no coverage as the hit-and-run vehicle did not hit the insured’s vehicle itself. Instead a log from the hit-and-run vehicle struck the insured.
The principle issue before this Court is whether the “physical contact” rule has been satisfied when an item falls off the hit-and-run vehicle and strikes the insured’s automobile. North Carolina has long followed the rule that when an unidentified vehicle causes an accident without actually hitting the insured’s vehicle, there is no liability on the behalf of the insurance company. The requirement for physical contact with the uninsured vehicle is required by both the statute and the policy. Hendricks v. Guaranty Co., 5 N.C. App. 181, 167 S.E.2d 876, cert. denied, 275 N.C. 594 (1969).
In Petteway v. South Carolina Insurance Company, 93 N.C. App. 776, 379 S.E.2d 80, disc, review denied, 325 N.C. 273, 384 S.E.2d 518 (1989), this Court stated in dicta that UM coverage requires a colli*114sion between motor vehicles and does not apply when the insured merely runs into something other than a vehicle, such as a ditch. Id. at 777-78, 384 S.E.2d at 81.
The purpose of the physical contact rule is to prevent fraudulent claims and has been maintained even when there is a disinterested eyewitness. (In Petteway, despite there being an eyewitness, recovery was denied.)
This Court has allowed recovery, however, when the unidentified tortfeasor collided with the rear of a car which collides with a third vehicle which then struck the insured. McNeil v. Hartford Accident and Indemnity Co., 84 N.C. App. 438, 352 S.E.2d 915 (1987).
In McNeil, this Court ruled that the physical contact rule is satisfied if the plaintiff can prove that contact between the unidentified vehicle and their claimant’s vehicle occurred through an unbroken chain collision caused by a collision between the hit-and-run vehicle and an intermediate vehicle. The question then becomes whether the physical contact rule is satisfied when an item falls from the unidentified vehicle and strikes the insured.
Recently, the U.S. District Court for the Eastern District of North Carolina had just such a case where a rock fell from an unidentified dump truck, striking the insured’s vehicle causing it to run off the road, strike an embankment, and killing the driver.
In that case, Geico Ins. Co. v. Larson, (No. 5:06-CV-00505-BR), the district court, following a trend from other physical contact jurisdictions, held that the physical contact requirement could be met when the plaintiff can prove that the hit-and-run vehicle started an unbroken chain of events and that the reasoning from the McNeil case applied.
While not controlling, I find the Geico reasoning persuasive. Other jurisdictions have ruled likewise. See, e.g., Berry v. State Farm Mut. Auto Ins. Co., 219 Mich. App. 340, 556 N.W.2d 207 (1996); Will v. Meridian Ins. Group, Inc., 776 N.E.2d 1233, 1234 (Ind. Ct. App. 2002); and Pham v. Allstate Ins. Co., 254 Cal. Rptr. 152, 155 (Cal. App. 2d Dist. 1988).
I can see no difference between a vehicle and its cargo. Let us assume the hit-and-run vehicle was carrying its load of logs and that while changing lanes, one of the logs extending from the bed of the *115truck struck plaintiffs automobile. Would that not be a collision with the vehicle itself? Why should cargo falling from a vehicle be treated differently than when it is attached?
I believe the logic of the McNeil case is applicable, and thus the complaint should be construed to state a cause of action.