Court Opinion

ID: 9848953
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:31:00.038981+00
Date Added: 2024-06-11T09:18:55.342545
License: Public Domain

Justice Meyer
dissenting.
The majority errs in two major respects. First, it errs in holding that the tort-feasor’s vehicle is an “underinsured highway vehicle” within the meaning of the statute and the language of the policy of insurance in question. It further errs in holding that the minor plaintiff, a nonowner, is entitled to intrapolicy stack UIM coverages in determining Nationwide’s limit of liability under the policy.
I.
I disagree with the majority’s adoption of Judge Greene’s conclusion, in part I of his dissent below, that the tort-feasor’s vehicle here qualifies as an underinsured vehicle. I concur completely with the dissent of Justice Webb, in which he' concludes that the plain language of the statute requires a comparison of liability coverages to determine whether there is underinsured motorist coverage.
N.C.G.S. § 20-279.21(b)(4) requires insurers to provide insureds with UIM coverage, affording their insureds additional compensation when injured by an “underinsured highway vehicle.” “Underinsured highway vehicle” is defined by that same section as “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 liability under the owner’s policy." N.C.G.S. § 20-279.21(b)(4) (1989) (subsequently amended 1991) *196(emphasis added). Thus, in determining whether a “person insured” is entitled to UIM benefits, it must first be determined whether the vehicle at fault for the insured’s injuries was “underinsured.”N.C.G.S. § 20-279.21(b)(4) provides that this determination is to be made by comparing “the sum of the limits of liability” insurance for the at-fault vehicle with the “applicable limits of liability under the owner’s policy.” Only if the at-fault vehicle’s liability insurance is less than the applicable limits of the liability insurance under the owner’s policy is the injured insured entitled to UIM benefits. This interpretation fully comports with the General Assembly’s purpose of offering the added protection of UIM coverage only to insureds who have provided to third persons protection greater than that required by law.
Having compared the liability coverage of the two vehicles at issue here, it is evident to me that plaintiff was not injured by an underinsured highway vehicle within the meaning of N.C.G.S. § 20-279.21(b)(4), and plaintiff is therefore not entitled to the UIM benefits under the Nationwide policy. To say, as does the majority, that plaintiff is entitled to UIM benefits as a result of this accident completely ignores the fact that the applicable limits of liability under the Nationwide policy are equal to the liability insurance on the at-fault vehicle, and therefore the at-fault vehicle is not underinsured within the meaning of N.C.G.S. § 20-279.21(b)(4),
Even if the statute is read to require a comparison of the owner’s UIM coverage (before stacking) to the tort-feasor’s threshold liability coverage for one person under the policies in question here, the coverages are equal. Since the tort-feasor’s limit of liability insurance is equal to (not less than) the Nationwide underinsured limit before stacking, the plaintiff here fails to meet the threshold definition of an underinsured highway vehicle, and there is no underinsured motorist coverage to stack.
II.
Even if I agreed with the majority that the tort-feasor’s vehicle here was an underinsured vehicle, both the language of the policy and the statute prohibit Michelle K. Harris from intrapolicy stacking the UIM coverages to determine Nationwide’s limit of liability. This was the conclusion reached by Judge Greene in part II of his dissent below. With only minor changes in his language, I reiterate his reasoning with regard to both the provision of the policy and the statute.
*197Policy
The “Uninsured/Underinsured Motorists Coverage” endorsement in the insurance policy provides in pertinent part:
If this policy and any other auto insurance policy issued to you apply to the same accident, the maximum limit of liability for your or a family member’s injuries shall be the sum of the limits of liability for this coverage under all such policies.
In Smith v. Nationwide Mutual Ins. Co., 328 N.C. 139, 400 S.E.2d 44 (1991), this Court read this policy language to allow “the stacking of UIM coverages for a family member when the family member is covered by more than one policy issued to the named insured.” Id. at 146, 400 S.E.2d at 49. However, the unambiguous language of the policy suh judice prevents stacking of the UIM coverages contained in it.
The above endorsement language requires two or more policies before stacking is allowed by a family member. Here, Michelle Harris was covered by only one policy. This interpretation becomes irrefutable in light of the policy definition of “limit of liability,” which limits the defendant’s liability for UIM coverage to $100,000 “regardless of the number of . . . [v]ehicles or premiums shown in the Declarations.” Therefore, the endorsement language, read in connection with the “limit of liability” provision, prohibits the stacking by a family member of multiple UIM coverages contained in a single policy.
Statute
Whether under the statute a nonnamed insured, such as Michelle Harris, is entitled to stack UIM coverages to determine the insurer’s limit of liability is an issue that has not been addressed by this Court. In Sutton v. Aetna Casualty & Surety Co., the plaintiff injured party was the policyholder (owner) and named insured of all of the policies of insurance that the Court allowed to be stacked. Sutton, 325 N.C. 259, 261-62, 382 S.E.2d 759, 761, reh’g denied, 325 N.C. 437, 384 S.E.2d 546 (1989). When presented with a case where the injured party was not the policyholder, this Court refused to apply the statutory analysis used in Sutton to determine the issue of stacking of UIM coverages. Smith, 328 N.C. at 151-52, 400 S.E.2d at 52. Instead, in Smith, this Court allowed stacking, not under the provisions of the statute, but under the terms of the policy. Id.
*198The UIM statute provides in pertinent part:
In any event, the limit of underinsured motorist coverage applicable to any claim is determined to be the difference between the amount paid to the claimant pursuant to the exhausted liability policy and the total limits of the owner’s underinsured motorist coverages provided in the owner’s policies of insurance; it being the intent of this paragraph to provide to the owner, in instances where more than one policy may apply, the benefit of all limits of liability of underinsured motorist coverage under all such policies: Provided that this paragraph shall apply only to nonfleet private passenger motor vehicle insurance as defined in G.S. 58-40-15(9) and (10).
N.C.G.S. § 20-279.21(b)(4) (emphasis added). The statute is unambiguous in its language that only the “owner” is allowed “the benefit of all limits of liability of underinsured motorist coverage under all such policies.” In other words, only the “owner” can stack underinsured motorist’s “coverages and policies.” See Sutton, 325 N.C. at 265, 382 S.E.2d at 763 (statute allows stacking of coverages and policies). Unlike the case at bar, in Sutton, the plaintiff was the owner of both the policies of insurance and the insured vehicles. The statute reference to “owner,” in context, refers to the owner of the policies or policy of insurance containing underinsured motorist coverages. See N.C.G.S. § 20-4.01(26) (Supp. 1991) (unless context of statute requires a different definition, definition of words in N.C.G.S. § 20-4.01 applies to statute). Therefore, under the statute, Michelle Harris, who is not the owner of the policy in question, is not allowed to stack the underinsured motorist coverages available on the policy of insurance issued by the defendant Nationwide to Michelle’s parents. I find this reasoning entirely convincing.
The statute requires UIM stacking for owners only. However, it also makes an express provision for coverage “in excess of or in addition to the coverage specified for a motor vehicle liability policy and such excess or additional coverage shall not be subject to the provisions of this Article.” N.C.G.S. § 20-279.21(g) (1989). Hence, if a policy provided nonrequired coverage for nonowners, such as intrapolicy stacking, such coverage would be “additional coverage” as that term is contemplated by the Financial Responsibility Act. While stacking for owners is required, nonowners obtain more coverage as “additional” or “excess” coverage, which is allowed by N.C.G.S. § 20-279.21(g).To the extent that a nonowner *199has additional or excess coverage, the excess amounts represent voluntary coverage that is not subject to the compulsory provisions of the statute. Id. Stacking multiple vehicles on one policy by a nonowner is “in addition to” the coverage required by the terms of N.C.G.S. § 20-279.21(b)(4).
In the case sub judice, Michelle Harris is neither the owner of the policy at issue nor of the vehicles on the policy. The UIM statute does not change the antistacking language of the policy to require that Michelle be allowed to intrapolicy stack the coverages on her parents’ policy.
The explicit language of the statute is: “It being the intent of this paragraph to provide to the owner . . . the benefit of all limits of liability . . . .” N.C.G.S. § 20-279.21(b)(4) (emphasis added). Disregarding completely the explicit language of the statute and the policy as to who is an “owner” of the policy, the majority permits a nonowner to intrapolicy stack UIM coverage because, by doing so, the owners would “benefit financially when their minor daughter, a member of their household, is injured by an underinsured motorist.” Resorting to the question of which interpretation of a statute or contract of insurance will result in the greater financial benefit as opposed to the plain words of the statute and the policy is completely unacceptable to me.
I now address two other matters that I believe merit consideration: the majority’s disregard of the recent legislative amendment to the statute in question, prohibiting intrapolicy stacking, and the public policy reasons for not allowing stacking under the facts of this case.
This Court should not read the present subsection (b)(4) expansively to allow intrapolicy stacking in light of the recent legislative amendment to the statute. See 1991 N.C. Sess. Laws ch. 646, § 2. The amended statute contains the following provision:
The underinsured motorist limits applicable to any one motor vehicle under a policy shall not be combined with or added to the limits applicable to any other motor vehicle under that policy.
N.C.G.S. § 20-279.21(b)(4) (Supp. 1991). Although the amendment to the statute is inapplicable to this case by reason of its effective date, it should nevertheless be considered by this Court as support for the proposition that the legislature never intended intrapolicy *200stacking even under the present statute. Unless they expressly say so, amendments to statutes are not necessarily clarifications of legislative intent. Nevertheless, the fact that the legislature has amended N.C.G.S. § 20-279.21(b)(4) since the accident in this case to eliminate intrapolicy stacking is some additional evidence that the statute’s general purpose, which has not been changed, is best served when the statute is interpreted so as not to extend stacking privileges to all covered or insured persons. See Proctor v. N.C. Farm Bureau Mutual Ins. Co., 324 N.C. 221, 225, 376 S.E.2d 761, 765 (1989). This recent amendment, at the very least, should-serve to curb any further expansion of the category of persons who are allowed to stack coverages of multiple vehicles on a single policy under the present statute.
The majority makes the point that separate UIM premiums are charged for each vehicle covered under a single policy. A premium is charged for each covered vehicle because of the increased risk of all of the insured vehicles being involved in an accident or accidents during the same policy term. Several motor vehicles belonging to one household can be, and frequently are, on the road at the same time, thereby justifying separate premiums for coverage on each vehicle due to the increased exposure of the several vehicles, as opposed to a single vehicle, being involved in separate accidents. A treatise on insurance law and practice is instructive on this point:
A few of the decisions adhering to the rule against the stacking, or accumulation of UM coverages, use the correct reasoning. That is, the actual exposure of an insurer is multiplied by the number of vehicles, since different persons will be driving them upon separate occasions and the risk is thereby multiplied, so that separate coverage must be carried upon each whenever that particular vehicle is used.
Although some courts . . . pay considerable attention to policy language, actually the intent of most policies is reasonably clear. This is true of the “each person” proviso in the insuring agreements, irrespective of the number of vehicles insured. There is no rule which forbids a single insurer, ordinarily, from providing against the tacking, or stacking, of the coverages available to the several vehicles of a single insured. Nor is this considered to be against public policy, if it at least meets the minimum amount required by statute.
*2018C John A. Appleman & Jean Appleman, Insurance Law and Practice § 5106, at 517 (1981) (footnotes omitted). The treatise further states:
If it is not reasonable to argue for a doubling or tripling of liability limits when there is a single policy owner, and a single company, then it is not reasonable to urge such a position for uninsured motorist coverages. Yet . . . the majority of courts have confused themselves upon this issue, feeling that unless they double up such UM coverage, the insurer somehow receives a windfall, since it charges a separate premium for each coverage as it applies to a separate automobile.
Let us analyze this reasoning, for a moment. If there were but a single insured, and only he ever drove an automobile, obviously he can drive only one vehicle at a time and the reasoning of such courts might then be logical. But, in considering basic underwriting and the actuarial computation of rate structures, we must take into consideration the customary procedures of mankind. Automobile policies are now written so as to afford liability protection not only to the named insured, who is usually the owner, but to members of his family, perhaps persons residing in the same household, and — with a few exceptions — anyone operating with the permission of the named insured or adult members of his household. When it comes to UM coverages, we have a like multiplication of exposure, since we have classes of risk, including all of the persons stated above, and pedestrians as well, with benefits granted in many circumstances when one may be in another vehicle or even upon the highway.
When the insured then owns more than a single vehicle, almost always it is with the contemplation that the second, or third, vehicles will be operated by others. And those others may, also, if injured by an uninsured motorist, expose the insurer to loss under that aspect of the contract.
Now it could reasonably be argued that an insured owning several automobiles could insure only one of them for liability, or for collision, or comprehensive, damages — yet collect as to any loss inflicted by, or upon, any of those vehicles he elected not to insure. Yet this is precisely the result for which policyholders, or their counsel, contend under UM coverages and which has been upheld repeatedly by the courts. Similarly, *202it is no more logical to double, or triple, a single limit of UM coverage, the amount of which the insured deliberately selected, and tender it free to the insured.
We may summarize the situation where there is a single policy owner, single company, and multiple vehicles by saying that the proper result is: “What you buy is what you get — and no more.” It is time for those courts, which have been so generous with the funds of others, to take a new look at this problem.
Id. § 5101, at 449-51 (footnotes omitted).
Another commonly made argument is also relied upon by the majority, as it was by Judge Greene in part I of his dissent, with which I have previously stated I disagree. Judge Greene wrote:
In Sutton, our Supreme Court held that the statute should be construed to prevent the “ ‘anomalous situation that an insured is better off — for purposes of the underinsured motorist coverage — if separate policies were purchased for each vehicle.’ ” [325 N.C.] at 267, 382 S.E.2d at 764 (citation omitted).
To construe “applicable limits of liability under the owner’s policy” to be the amount of UIM coverage on any one vehicle shown in the policy declarations, here $100,000, would result in an anomalous situation where the insured would be better off had he purchased separate policies for each vehicle. If separate policies had been purchased, providing the same coverage on each of the three vehicles, the “limits of liability” under the UIM endorsement would have been $300,000.
Harris v. Nationwide Mut. Ins. Co., 103 N.C. App. 101, 107, 404 S.E.2d 499, 503 (1991) (Greene, J., dissenting).
As a result of hindsight gained since this Court’s decision in Sutton, I now question whether I voted correctly to allow stacking in that case. As the record in this case reveals, there may indeed be adequate justification for treating the two situations differently. I am now convinced that this is not necessarily an anomalous result, since different premiums are charged under these two different circumstances. When separate policies are purchased, the premiums paid are typically higher to cover the increased risk assumed by the insurer. When multiple vehicles are covered on *203a single policy, the premium is generally less because multivehicle discounts are provided to the policyholders.
In the policy issued by Nationwide to the Harrises, the first vehicle has a total premium of $289.60, whereas the second vehicle only has a premium totalling $131.30, as does the third vehicle. This discount is noted on the declarations page as “discounts applied,” referring to “multi car.”
Automobile insurance, although regulated by statute, is still governed by contract law, where private parties are allowed to determine their respective rights as long as their private agreement does not conflict with the applicable statutory provisions. An insurer accepts a specifically defined risk in exchange for an agreed upon premium amount that adequately compensates the insurer for the risk being assumed. Thus, the premium is by necessity related to the risk being undertaken.
Accordingly, as the majority of this Court liberalizes the statute beyond its terms and allows more and more persons to stack multiple car coverages, the premiums charged by the insurers will inevitably be increased. Premiums will likely increase to the point (and indeed they may already have) where many insureds will begin to reject UIM coverage. This result can only be detrimental to the public good in the long run, as motorists will begin to carry less and less protection.
The issue becomes not how much coverage one can voluntarily choose to purchase, but rather, how much coverage will be required and at what costs to society and the consuming public. Continued expansion of UIM coverage may eventually have the unwanted and deleterious result of reducing an accident victim’s ability to recover, thereby thwarting the remedial purpose for the Financial Responsibility Act.
For the reasons stated, I respectfully dissent from the majority opinion and vote to reverse the decision of the Court of Appeals.
Justice LAKE joins in this dissenting opinion.