Court Opinion

ID: 4531655
Source: CourtListenerOpinion
Date Created: 2020-05-05 12:07:51.905869+00
Date Added: 2024-06-11T12:29:15.189218
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                  No. COA19-458

                                Filed: 5 May 2020

Guilford County, No. 18-CVS-8688

NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, INC.,
Plaintiff,

            v.

JUDY LUNSFORD, Defendant.

      Appeal by Defendant from Order and Declaratory Judgment entered 3

February 2019 by Judge Michael D. Duncan in Guilford County Superior Court.

Heard in the Court of Appeals 13 November 2019.

      William F. Lipscomb for the Plaintiff-Appellee.

      Burton Law Firm, PLLC, by Jason M. Burton, for the Defendant-Appellant.

      BROOK, Judge.

      Judy Lunsford (“Defendant”) appeals from the trial court’s grant of a motion

for judgment on the pleadings in favor of North Carolina Farm Bureau Mutual

Insurance Company, Inc. (“Plaintiff”) and issuance of a declaratory judgment that

Defendant is not entitled to underinsured motorist coverage under her policy issued

by Plaintiff. We affirm the Order and Declaratory Judgment of the trial court.

                      I. Factual and Procedural Background
                 N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                   Opinion of the Court

      On 22 May 2017, Defendant was a passenger in her sister’s 2015 Chevrolet

Silverado when the two were involved in a tragic accident. Defendant’s sister lost

control of the vehicle, ran over the median, and collided head-on with an oncoming

18-wheeler traveling in the opposite lane of traffic. Defendant’s sister lost her life in

the accident and Defendant suffered serious injuries.        The accident occurred in

DeKalb County, Alabama. At the time of the accident, Defendant was a resident of

North Carolina and her sister was a resident of Tennessee.

      At the time of the accident, both Defendant and her sister carried automotive

insurance. Defendant’s policy was issued by Plaintiff in North Carolina and her

sister’s policy was issued by Nationwide in Tennessee, where each resided in May

2017. The coverage amounts in the policies are similar. Both policies limit the

respective insurer’s liability for personal injuries to $100,000 per occurrence and for

injuries to under- or un-insured motorists to $100,000 per occurrence.

      Plaintiff initiated an action for a declaratory judgment on 24 October 2018 in

Guilford County Superior Court requesting a determination that the underinsured

motorist coverage in the policy it issued Defendant did not apply to the accident

because her underinsured motorist coverage limits equaled her sister’s personal

injury coverage, meaning Defendant was not underinsured at the time of the

accident. After Defendant answered, Plaintiff moved the trial court for judgment on

the pleadings on 19 December 2018 under Rule 12(c) of the North Carolina Rules of

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                N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                  Opinion of the Court

Civil Procedure. Following a 28 January 2019 hearing on the matter, the trial court

granted Plaintiff’s motion and entered an Order and Declaratory Judgment in favor

of Plaintiff on 13 February 2019. Plaintiff entered timely notice of appeal on 14

March 2019.

                                     II. Analysis

      The dispositive issue in this appeal is whether the vehicle in which Defendant

was traveling with her sister at the time of the May 2017 accident qualified as an

“underinsured motor vehicle” as that term is defined under North Carolina law.

Because it did not, we affirm the Order and Declaratory Judgment of the trial court.

                               A. Standard of Review

      Under Rule 12(c) of the North Carolina Rules of Civil Procedure, “any party

may move for judgment on the pleadings.” N.C. Gen. Stat. § 1A-1, Rule 12(c) (2019).

“A motion for judgment on the pleadings should not be granted unless the movant

clearly establishes that no material issue of fact remains to be resolved and that he

is entitled to judgment as a matter of law.” Carpenter v. Carpenter, 189 N.C. App.
755, 761, 659 S.E.2d 762, 767 (2008). However, the motion should be granted when

“the moving party has shown that no material issue of fact exists . . . and that he is

clearly entitled to judgment.” Affordable Care v. N.C. State Bd. of Dental Exam’rs,

153 N.C. App. 527, 532, 571 S.E.2d 52, 57 (2002). “This Court reviews a trial court’s

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                 N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                      Opinion of the Court

grant of a motion for judgment on the pleadings de novo.” Carpenter, 189 N.C. App.

at 757, 659 S.E.2d at 764.

          B. Underinsured Motorist Coverage Under North Carolina Law

      North Carolina law defines “underinsured motor vehicle” 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 underinsured motorist
             coverage for the vehicle involved in the accident and
             insured under the owner’s policy.

N.C. Gen. Stat. § 20-279.21(b)(4) (2019) (emphasis added). The statutory definition

thus requires that the “sum of the limits of liability under all bodily injury liability

. . . insurance policies applicable” be less “than the applicable limits of underinsured

motorist coverage” for a vehicle involved in an accident to be considered

underinsured. Id.

      Whether an underinsured motorist policy is applicable at the time of an

accident under N.C. Gen. Stat. § 20-279.21(b)(4) depends upon whether the claimant

qualifies as a “person insured” as that term is defined by subdivision (3) of subsection

(b) of the statute, which provides:

             “persons insured” means the named insured and, while
             resident of the same household, the spouse of any named
             insured and relatives of either, while in a motor vehicle or
             otherwise, and any person who uses with the consent,
             expressed or implied, of the named insured, the motor
             vehicle to which the policy applies and a guest in the motor

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                N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                  Opinion of the Court

             vehicle to which the policy applies or the personal
             representative of any of the above or any other person or
             persons in lawful possession of the motor vehicle.
Id. § 20-279.21(b)(3). The Supreme Court has explained:

             [t]his section of the statute essentially establishes two
             “classes” of “persons insured”: (1) the named insured and,
             while resident of the same household, the spouse of the
             named insured and relatives of either and (2) any person
             who uses with the consent, express or implied, of the
             named insured, the insured vehicle, and a guest in such
             vehicle.

Sproles v. Greene, 329 N.C. 603, 608, 407 S.E.2d 497, 500 (1991) (citation omitted).

      The reason the applicability of an underinsured motorist policy depends on

whether the claimant qualifies as a “person insured” is that “[i]n North Carolina,

insurance coverage for damages caused by uninsured and underinsured motorists

‘follows the person, not the vehicle[.]’” Beddard v. McDaniel, 183 N.C. App. 476, 645
S.E.2d 153, 153-54 (2007) (quoting Nationwide Mut. Ins. Co. v. Mabe, 115 N.C. App.
193, 204, 444 S.E.2d 664, 671 (1994)). The Supreme Court put it slightly differently

in Sproles, observing that “[c]lass one insureds have UIM coverage even if they are

not in a ‘covered vehicle’ when injured.” 329 N.C. at 608, 407 S.E.2d at 500. The

Supreme Court also noted in Sproles that “[a]ll other persons are class two insureds

and are only covered while using [or guests in] ‘the motor vehicle to which the policy

applies.’” Id. Our Court has therefore described underinsured motorist insurance as

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                      N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                             Opinion of the Court

“essentially person oriented, unlike liability insurance[,] which is vehicle oriented.”

Honeycutt v. Walker, 119 N.C. App. 220, 222, 458 S.E.2d 23, 25 (1995).

                                               C. Application

        In the present case, the parties do not dispute whether Defendant is a named

insured under the policy issued to her by Plaintiff; instead, they dispute, amongst

other things, whether Tennessee or North Carolina law supplies the legal standards

applicable to determining whether Ms. Chapman was underinsured at the time of the

accident.      While Defendant’s policy issued by Plaintiff is an insurance contract

entered into by a North Carolina insurer and a North Carolina insured, and

concerning the interests of a North Carolina citizen, and North Carolina law therefore

applies to its construction and application, the policy does not cover her injuries from

the May 2017 accident.1 The limits of the policy issued by Plaintiff are $50,000 per

person and $100,000 per accident, which are the same as the limits of the personal

injury coverage under her sister’s policy with Nationwide. Because these are the only

two policies at issue, and the limits of Defendant’s underinsured motorist coverage

and her sister’s personal injury coverage are equal, in this case “the sum of the limits

        1   The same would be true if the definition of underinsured vehicle under Tennessee law
applied. Tennessee law terms underinsured motor vehicles “uninsured motor vehicles”; see Tenn. Code
§ 56-7-1202(a)(1) (2017); however, in essence the definition under Tennessee law mirrors that of North
Carolina, providing that “‘uninsured motor vehicle’ means a motor vehicle . . . for which the sum of the
limits of liability available to the insured under all . . . insurance policies . . . applicable . . . is less than
the applicable limits of uninsured motorist coverage provided to the insured under the policy against
which the claim is made[.]” Id. (emphasis added).

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                  N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                     Opinion of the Court

of liability under [the] bodily injury liability . . . policies applicable” is not less “than

the applicable limits of underinsured motorist coverage[.]” N.C. Gen. Stat. § 20-

279.21(b)(4) (2019). Defendant’s sister’s vehicle therefore was not underinsured as

that term is defined by North Carolina law.

       In arguing otherwise, Defendant contends—and the dissent accepts—that

Defendant is entitled to “stack the $50,000.00 limit of UIM coverage in [Ms.]

Chapman’s Nationwide policy with the $50,000.00 limit of UIM coverage in

[Defendant’s] NCFB policy.” See infra at ___ (Murphy, J., dissenting). But this

argument smuggles its conclusion from its first premise. This conclusion would follow

if Defendant and her sister were members of the same household because then,

Defendant and her sister would both be class one insureds as that term was defined

by our Supreme Court in Sproles.          See 329 N.C. at 608, 407 S.E.2d at 500. If

Defendant and her sister were members of the same household, both the

underinsured motorist coverage of $50,000 per person and $100,000 per accident in

Defendant’s policy and the “uninsured” motorist coverage of $50,000 per person and

$100,000 per accident in Defendant’s sister’s policy would qualify as “policies

applicable” under N.C. Gen. Stat. § 20-279.21(b)(4); the sum of their limits would be

more than the personal injury liability limits of $50,000 per person and $100,000 per

accident in Defendant’s sister’s policy; and, therefore, the 2017 accident would be

covered by Defendant’s underinsured motorist policy because her sister’s vehicle

                                            -7-
                N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                  Opinion of the Court

would have been an “underinsured motor vehicle” at the time of the accident as North

Carolina law defines that term.      See N.C. Gen. Stat. § 20-279.21(b)(4) (2019).

However, at the time of the accident, Defendant was a resident of North Carolina and

Defendant’s sister was a resident of Tennessee. The underinsured motorist coverage

in each of their policies were not both “policies applicable” to the accident, and the

vehicle was not underinsured under North Carolina law. See id.

                                   III. Conclusion

      We affirm the order of the trial court because Defendant is not entitled to

underinsured motorist coverage under her policy issued by Plaintiff.

      AFFIRMED.

      Judge STROUD concurs in result.

      Judge MURPHY dissents by separate opinion.

                                         -8-
No. COA19-458 – N.C. Farm Ins. Bureau Mut. Ins. Co., Inc. v. Lunsford

      MURPHY, Judge, dissenting.

      Judy Lunsford (“Lunsford”), a North Carolina citizen, was severely injured in

a car accident while riding in the car with her sister, Levonda Chapman (“Chapman”),

in Alabama. Chapman’s insurance policy contemplated coverage for a Tennessee

resident and her Tennessee-registered vehicle.     Nevertheless, Chapman’s policy

plainly states that it must be adjusted to comport with the Financial Responsibility

Acts (“FRA”) of other states if need be. Lunsford’s personal auto insurance policy

with the Plaintiff, North Carolina Farm Bureau Mutual Insurance Company, Inc.

(“NCFB”), provides for $50,000.00 of underinsured/uninsured motorist (“UIM”)

coverage. NCFB brought this suit seeking declaratory judgment that it does not need

to pay out the UIM coverage limit here because Chapman’s vehicle does not fit the

definition of an “underinsured motor vehicle” under Tennessee law.        However,

because Chapman’s vehicle is an underinsured motor vehicle under our FRA and

Chapman’s policy must comport with our FRA, I would hold Chapman’s vehicle is an

underinsured motor vehicle, and Lunsford is entitled to the $50,000.00 of UIM

coverage under her NCFB auto insurance policy.

                                 BACKGROUND

      This is a dispute over whether the Defendant-Appellant, Lunsford, is entitled

to $50,000.00 of underinsured motorist coverage from her auto insurer, Plaintiff-

Appellee NCFB. Lunsford was involved in a car accident while riding with her sister,
                 N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                  MURPHY, J., dissenting

Chapman, in Alabama. Chapman lost control of her car, crossed the median of an

interstate highway, and collided with a tractor-trailer. Chapman was killed and

Lunsford sustained serious injuries.

       At the time of the accident, Chapman was driving her car, which was covered

by a Nationwide Insurance policy issued to her in her home state of Tennessee, with

Lunsford as the sole passenger. Both Chapman’s Nationwide policy and Lunsford’s

own auto insurance policy, issued by NCFB, provided coverage limits of $50,000.00

per-person and $100,000.00 per-accident. Nationwide has offered “the $50,000[.00]

policy limit of its [bodily injury] liability coverage to Lunsford.”

       NCFB filed a Complaint for Declaratory Judgment in the Guilford County

Superior Court seeking judicial decree “that the UIM coverage of [Lunsford’s policy]

does not apply to [her] injuries from the . . . motor vehicle collision in question and

that [Lunsford] is not entitled to recover any UIM coverage from said policy regarding

the . . . motor vehicle collision in question[.]”    In answering NCFB’s complaint,

Lunsford argued that she is entitled to UIM coverage for three reasons: (1) she denied

the applicability of Tennessee law in the interpretation of the Nationwide policy “as

it relates to [NCFB’s] North Carolina UIM policy” and, instead, argued “North

Carolina law, and only North Carolina law, controls the interpretation of, and

relationship between, a North Carolina UIM policy and any other insurance policy at

issue”; (2) Lunsford argued NCFB’s claim is either barred by or inconsistent with the

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                 N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                 MURPHY, J., dissenting

North Carolina FRA (N.C.G.S. § 20-279.21, et. seq.); and (3) Lunsford argued NCFB’s

claim is barred by existing North Carolina law and Lunsford’s policy with NCFB.

       The parties each moved for a judgment on the pleadings pursuant to N.C.G.S.

§ 1A-1, Rule 12(c), and, after a hearing on the motions, the trial court entered an

order granting NCFB’s motion for judgment on the pleadings, granting declaratory

judgment in favor of NCFB, and denying Lunsford’s motion for judgment on the

pleadings. The trial court concluded the UIM policy “issued by [NCFB] to [Lunsford]

does not apply to [Lunsford’s] injuries from the [22 May 2017] motor vehicle collision

in question and defendant is not entitled to recover any UIM coverage from [her

NCFB] policy . . . .” Lunsford timely appeals.

                                     ANALYSIS

                              A. Standard of Review

      Lunsford notes in her brief that “[t]his appeal concerns entirely a matter of

law, not fact, and therefore the appropriate standard of review . . . is de novo.” As is

true in the analogous situation where we receive an appeal from a grant of summary

judgment, “[b]ecause the parties do not dispute any material facts, ‘we review the

trial court’s order . . . de novo to determine whether either party is entitled to

[declaratory judgment on the pleadings].’” Lanvale Props., LLC v. Cty. of Cabarrus,

366 N.C. 142, 149, 731 S.E.2d 800, 806 (2012) (quoting Robins v. Town of

Hillsborough, 361 N.C. 193, 196, 639 S.E.2d 421, 423 (2007)) (internal alterations

                                          -3-
                 N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                 MURPHY, J., dissenting

omitted). “Under a de novo review, the court considers the matter anew and freely

substitutes its own judgment for that of the lower tribunal.” State v. Williams, 362
N.C. 628, 632-33, 669 S.E.2d 290, 294 (2008) (citation and internal quotation marks

omitted).

                             B. Declaratory Judgment

        The only distinct issue on appeal is whether the trial court erred in granting

NCFB’s motion for judgment on the pleadings and, in turn, rendering a declaratory

judgment that Lunsford is not entitled to the UIM coverage under her NCFB

insurance policy. The parties’ major point of disagreement on appeal, as below, is

whether we should apply the North Carolina definition or the Tennessee definition of

“underinsured motorist” in interpreting the meaning of that term as it relates to

Lunsford’s policy with NCFB. Lunsford is not entitled to receive UIM coverage unless

Chapman’s vehicle is an “underinsured motor vehicle.”

        In her brief, Lunsford argues Chapman’s Nationwide policy is governed by

“North Carolina law, and only North Carolina law,” and should be interpreted as

such.   Lunsford further argues Chapman’s car is underinsured pursuant to our

statutes and caselaw and she is, therefore, entitled to the (to-date) unpaid $50,000.00

of UIM coverage contemplated in her policy with NCFB.           NCFB concedes that

Lunsford’s argument would be correct if North Carolina law applies to Chapman’s

                                         -4-
                 N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                 MURPHY, J., dissenting

policy with Nationwide but argues Tennessee law—not ours—governs the applicable

definition of “underinsured motor vehicle.”

      Our General Statutes provide, “All contracts of insurance on property, lives, or

interests in this State shall be deemed to be made therein, and all contracts of

insurance the applications for which are taken within the State . . . are subject to the

laws thereof.” N.C.G.S. § 58-3-1 (2019). Lunsford’s insurance policy with NCFB falls

under this statute as an insurance contract entered into by a North Carolina insurer

and North Carolina insured, and concerning the interests of a North Carolina citizen.

The parties spent much of their briefs, as well as their oral arguments, arguing about

the applicability of N.C.G.S. § 58-3-1—and the related caselaw regarding the nexus

between the interests insured under the policy and North Carolina law—on

Chapman’s policy.     See, e.g., Collins v. Aikman Corp. v. Hartford Accident &

Indemnity Co., 335 N.C. 91, 95, 436 S.E.2d 243, 246 (1993). However, this statute

and the related cases do not factor in to today’s decision, which is based instead on

the conformity clause in Chapman’s policy, our caselaw on such clauses, and our FRA.

The caselaw regarding the nexus between the interests insured under Chapman’s

policy and our laws do not play a role in this decision.

      Chapman’s policy explicitly incorporates our FRA, and I would hold North

Carolina’s UIM definition in the FRA applies and Lunsford is entitled to $50,000.00

                                          -5-
                N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                MURPHY, J., dissenting

of UIM coverage pursuant to her agreement with NCFB. This holding would apply

regardless of any “nexus” between Chapman’s policy and North Carolina.

      In relevant part, our FRA defines “underinsured motor vehicle” 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 underinsured motorist
            coverage for the vehicle involved in the accident and insured
            under the owner’s policy.

N.C.G.S. § 20-279.21(b)(4) (2019) (emphasis added). Lunsford’s NCFB auto insurance

policy incorporates our FRA, and defines “underinsured motor vehicle” as:

            [A] land motor vehicle or trailer of any type:

            1. The ownership, maintenance or use of which is insured
            or bonded for liability at the time of accident; and

            2. The sum of the limits of liability under all bodily injury
            liability bonds and insurance policies applicable at the time
            of the accident is equal to or greater than the minimum
            limit specified by the financial responsibility law of North
            Carolina and:

            a. is less than the limit of liability for this coverage; or

            b. the total limit of liability available has been reduced to
               less than the limit of liability for this coverage by
               payment of damages to other persons.

      Like Lunsford’s policy, Chapman’s Nationwide policy incorporates our FRA’s

definitions in certain circumstances, stating, “We will adjust this policy to

comply . . . [w]ith the financial responsibility law of any state or province which

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                   N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                     MURPHY, J., dissenting

requires higher liability limits than those provided by this policy.” We have held that

where an out-of-state policy includes a conformity clause, “which, by its very terms,

requires us to examine North Carolina law to determine” whether a certain kind of

coverage is available, we will apply our laws in interpreting the out-of-state policy.

Cartner v. Nationwide Mut. Fire Ins. Co., 123 N.C. App. 251, 254, 472 S.E.2d 389, 391

(1996).

       There was a provision nearly identical to the conformity clause in Chapman’s

policy in an out-of-state insurance policy at issue in Cartner, 123 N.C. App. at 252,

472 S.E.2d at 390. In Cartner, we reasoned that although the Florida insurance

policy included a “family member exclusion,” that exclusion did not comport with the

“‘kind[s] of coverage’ required by North Carolina’s [FRA].” Id. at 255, 472 S.E.2d at

291. We required the defendant to “adjust the limits of its Florida policy to provide

such coverage to plaintiff’s decedent as required by North Carolina [law].” Id. In

following our precedent from Cartner here, Chapman’s Nationwide policy must be

adjusted to comport with our FRA’s definition of an underinsured motor vehicle and

the accompanying caselaw.

       Tennessee law relies upon a different definition of “uninsured motor vehicles.”2

Tennessee does not consider a vehicle “uninsured” where that vehicle is “[i]nsured

2
 Tennessee does not differentiate between uninsured and underinsured motorists, both of which fall
under the definition of “uninsured motorist.” Tenn. Code Ann. § 56-7-1202 (West 2017).

                                              -7-
                N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                MURPHY, J., dissenting

under the liability coverage of the same policy of which the uninsured motor vehicle

coverage is a part[.]” Tenn. Code. Ann. § 56-7-1202(2)(A) (West 2017). There is

similar language in Chapman’s insurance policy, which states that because she is

entering into this insurance agreement to cover her car, that car can no longer be

defined as an “uninsured motor vehicle.” Applying only this part of Chapman’s

insurance policy and Tennessee’s law, Lunsford would not receive UIM coverage

under her policy with NCFB because her accident did not involve an underinsured

highway vehicle.

       However, our FRA’s definition of “underinsured motor vehicle” is completely

different from the one set out in Chapman’s policy and Tennessee’s statutes, and—as

in Cartner—provides a different kind of coverage than what is contemplated in

Chapman’s policy. See Cartner, 123 N.C. App. at 255, 472 S.E.2d at 291. Unlike

Chapman’s policy, our FRA provides for UIM coverage in instances where, as here,

the tortfeasor’s vehicle was covered by a policy that had lower bodily injury liability

limits than the applicable UIM limits in the victim’s policy.         N.C.G.S. § 20-

279.21(b)(4) (2019). Pursuant to its conformity clause, Chapman’s policy must be

adjusted in order to comply with our definition of “underinsured motor vehicle,” which

requires more coverage than Chapman’s policy would allow if applying Tennessee

law.

                                         -8-
                 N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                 MURPHY, J., dissenting

      For a UIM policy to be applicable under N.C.G.S. § 20-279.21(b)(4) the claimant

must be a “person insured” under N.C.G.S. § 20-279.21(b)(3). Our Supreme Court

has clarified that there are two classes of insureds:

             [N.C.G.S. § 20-279.21(b)(3)] essentially establishes two
             “classes” of “persons insured”: (1) the named insured and,
             while resident of the same household, the spouse of the
             named insured and relatives of either and (2) any person
             who uses with the consent, express or implied, of the
             named insured, the insured vehicle, and a guest in such
             vehicle.
Sproles v. Greene, 329 N.C. 603, 608, 407 S.E.2d 497, 500 (1991). “Class one insureds

have UIM coverage even if they are not in a covered vehicle when injured. All other

persons are class two insureds and are only covered while using the motor vehicle to

which the policy applies.” Id. (internal marks omitted). In this case, Lunsford, as the

named insured, is a class one insured with respect to the NCFB policy, meaning that

she has UIM coverage under this policy “even if [she is] not in a covered vehicle when

injured.” Id. (internal marks omitted). She is also a class two insured with respect

to Chapman’s Nationwide policy as a guest in the insured vehicle with consent of the

named insured, meaning she also has UIM coverage under this policy because she

was “using the motor vehicle to which the policy applies.”        Id. (internal marks

omitted). In sum, Lunsford is able to receive UIM coverage under her own NCFB

policy because, as a class one insured, it follows her even though she was injured in

Chapman’s car. Additionally, she is able to receive UIM coverage under Chapman’s

                                          -9-
                N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                MURPHY, J., dissenting

Nationwide policy because, as a class two insured, she was injured as a guest in a

vehicle insured by Chapman’s Nationwide policy.

      In addition to the statutory definition of “underinsured motor vehicle,” our

caselaw provides that UIM limits in a tortfeasor’s policy and the policy covering the

injured passenger can be “stacked” to establish that the tortfeasor’s car is an

“underinsured highway vehicle.” Benton v. Hanford, 195 N.C. App. 88, 94, 671 S.E.2d

31, 34 (2009). In Benton, much like the case sub judice, a guest in a car, Benton, was

injured when the owner and operator of the car, Hanford, crashed the vehicle. Id. at

89, 671 S.E.2d at 32. There, we stacked the UIM coverage of $50,000.00 from the

policy of the tortfeasor with the UIM coverage of $100,000.00 from the policy of the

injured guest in the car to determine that the tortfeasor’s car, which only carried

$50,000.00 in liability coverage, was an underinsured motor vehicle under N.C.G.S.

§ 20-279.21(b)(4). Id. at 94, 671 S.E.2d at 35. Here, we should do the same; I would

stack the $50,000.00 limit of UIM coverage in Chapman’s Nationwide policy with the

$50,000.00 limit of UIM coverage in Lunsford’s NCFB policy. I would hold that,

because the sum of the stacked UIM coverage ($100,000.00) is greater than the bodily

injury liability limit of the Nationwide policy ($50,000.00), the tortfeasor’s car

(Chapman’s) is an underinsured highway vehicle.

                                  CONCLUSION

                                        - 10 -
                    N.C. FARM BUREAU MUT. INS. CO., INC. V. LUNSFORD

                                       MURPHY, J., dissenting

       Chapman’s insurance policy states that it must be adjusted to comport with

our FRA. Under our FRA, Chapman’s vehicle fits the definition of an “underinsured

motor vehicle.” As Chapman’s vehicle is an underinsured motor vehicle under North

Carolina law, Lunsford is entitled to judgment on the pleadings and the $50,000.00

of UIM coverage under her NCFB insurance policy.

       I respectfully dissent and would reverse.3

       3  I do not address the issue of which insurer providing UIM coverage is entitled to a credit for
the payment of liability insurance by Nationwide because Nationwide is not a party to this action,
despite our prior language that “[w]hen there is more than one UIM carrier involved, allocation of the
credit for liability payments is necessary.” Benton, 195 N.C. App at 95, 671 S.E.2d at 35 (citing Onley
v. Nationwide Mutual Ins. Co., 118 N.C. App. 686, 691, 456 S.E.2d 882, 885 (1995)).

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