Court Opinion

ID: 9540855
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:20:20.430428+00
Date Added: 2024-06-11T15:01:20.803748
License: Public Domain

Justice Meyer
dissenting.
I respectfully dissent from the majority opinion on the basis of my dissent in Powe v. Odell, 312 N.C. 410, 416, 322 S.E. 2d 762, 766 (1984), wherein I was joined by Justices Copeland (now retired) and Mitchell in my conclusion that N.C.G.S. § 24-5 *465violates the Equal Protection Clause of the United States Constitution as well as provisions of the North Carolina Constitution. For the same reasons expressed in my dissent in Powe, I conclude that the statute also violates the Due Process Clause of the Fourteenth Amendment to the United States Constitution and the “law of the land” provision (art. I, § 19) of the North Carolina Constitution.
The fundamental principles of “substantive due process” as collected in 16A Am. Jur. 2d Constitutional Law § 816 at 978-81 (1979), may be summarized as follows: In substantive law, due process may be characterized as a standard of reasonableness, which is similar to the standard or test of “rational basis” used in determining a claim of unequal protection of the laws. The analysis for substantive due process is not dissimilar from the analysis for equal protection. Substantive due process differs from equal protection in that substantive due process analysis considers the overall fairness of legislation and the relationship between the means used to achieve a legislative goal, and the achievement of that goal. It is not enough that the objective being sought by the legislature has a rational basis, but the manner in which the legislature attempts to achieve that objective must itself have a real and substantial relationship to the objective being sought and not be arbitrary or unreasonable. The due process principle is a limitation upon arbitrary power. While the principle has its origin in England as a protection to citizens from arbitrary action by the Crown, it has been said that in this country the requirement is intended to have a similar effect against legislative power. It is the principle that protects our citizens against arbitrary legislation, demanding that the law shall not be unreasonable, arbitrary or capricious, and that means selected by the legislature to meet a permissible legislative objective shall have a real and substantial relation to that objective.
The principle of due process is synonymous with the principle of “law of the land” announced in our state constitution.
[D]ue process of law and the equivalent phrase “law of the land” have frequently been defined to mean a general and public law operating equally on all persons in like circumstances, and not a partial or private law affecting the rights of a particular individual or class of individuals in a way in *466which the same rights of other persons are not affected. Under this guaranty not only must a statute embrace all persons in like situation, but the classification must be natural and reasonable, not arbitrary and capricious. The guaranty is violated by a statute embodying a classification which is not based upon some real and substantial distinction, bearing a reasonable and just relation to the things in respect to which the classification is imposed. Due process of law is denied when any particular person of a class or of the community is singled out for the imposition of restraint or burdens not imposed upon, and to be borne by, all of the class or of the community at large, unless the imposition or restraint is based upon existing distinctions that differentiate the particular individuals of the class to be affected from the body of the community. (Emphasis added.)
16A Am. Jur. 2d Constitutional Law § 817 at 985-86.
As I indicated in my dissent in Powe, I am convinced that assessment of prejudgment interest only on claims covered by insurance is arbitrary, unfair, and unreasonable and has no substantial relation or rational relationship to the legislative goal,1 and *467indeed fails to meet the very objective intended by the legislature.2 For these reasons, I conclude that N.C.G.S. § 24-5 violates the Due Process Clause of the Fourteenth Amendment to the United States Constitution and the “law of the land” provision (art. I, § 19) of the North Carolina Constitution.
Justice MITCHELL joins in this dissenting opinion.

. Although the question of impairment of contract was not specifically raised before the trial court or the Court of Appeals, I am of the opinion that it is at least arguable that the “law of the land” provision of our state constitution embodies the concept of impairment of contract set forth specifically in art. I, § 10, cl. 1 of the United States Constitution, which provides in pertinent part: “No state shall . . . pass any . . . law impairing the obligations of contracts. . . .” This clause of the federal constitution imposes limits upon the power of the states to abridge existing contractual relationships, even in the exercise of its otherwise' legitimate police power. Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 57 L.Ed. 2d 727 (1978). The contract at issue in this case was entered into prior to the enactment of N.C.G.S. § 24-5 and it is indeed an ancient and long-standing rule of law that the obligation of a contract within the meaning of the constitutional provisions against impairment depends upon the laws in existence when the contract is made. See, e.g., Wood v. Lovett, 313 U.S. 362, 85 L.Ed. 1404 (1941); McCracken v. Hayward, 43 U.S. 608,11 L.Ed. 397 (1844). Moreover, the obligation of contract includes the legal remedies which belong to it at the time and place of its creation; the ideas of validity and remedy are therefore inseparable, and both are parts of the obligation which is guaranteed by the constitution against impairment. Home Bldg. & Loan Assoc. v. Blaisdell, 290 U.S. 398, 78 L.Ed. 413 (1934). The policy involved in this action contains the provision that the insurer shall be liable for “all interest accruing after entry of judgment until the company has paid, tendered or deposited in court such part of such judgment as does not exceed the limit of the company’s liability. . . .” (Emphasis added.) The clear implication of this language is that prejudgment in*467terest is not to be paid by the company. Thus, the new statute imposes an obligation upon the insurer which is contrary to the provisions of the preexisting contract between the parties, and so substantively and severely impairs the obligations of the parties thereunder.

. The constitutional shortcomings that I perceive in N.C.G.S. § 24-5 can be easily overcome by appropriate legislation. This could be achieved by allowing no prejudgment interest against any defendant or by allowing prejudgment interest across the board, in all tort cases, against all defendants. As of this writing, the legislature is in session and legislation allowing prejudgment interest across the board in all tort cases has been introduced and is now being debated. Positive action by the legislature is called for.