Court Opinion

ID: 9348709
Source: CourtListenerOpinion
Date Created: 2022-12-20 14:12:43.074069+00
Date Added: 2024-06-11T16:42:22.375230
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                     2022-NCCOA-300

                                      No. COA21-326

                                     Filed 3 May 2022

     Davie County, No. 19 CVS 470

     GILBERT DEAN TUTTEROW, Administrator of the Estate of Vivian Lynn Tutterow,
     Plaintiff,

                 v.

     BRIAN K. HALL, KRIS H. HALL; RANDY HALL AUTOMATIVE, LLC; STATE
     FARM MUTUAL AUTOMOBILE INSURANCE COMPANY; and HORACE MANN
     PROPERTY AND CASUALTY INSURANCE COMPANY, Defendants.

     Appeal by plaintiff from order entered 7 January 2021 by Judge Joseph N. Crosswhite

     in Davie County Superior Court. Heard in the Court of Appeals 9 February 2022.

           Martin & Van Hoy, LLP by Henry P. Van Hoy, II; Katherine Freeman, PLLC
           by Katherine Freeman, for plaintiff.

           McAngus, Goudelock & Courtie, PLLC by Jeffrey B. Kuykendal, for defendant
           State Farm Mutual Automobile Insurance Company.

           Teague, Rotenstreich, Stanaland, Fox & Holt, PLLC by Kara V. Bordman,
           Kenneth B. Rotenstreich, and Robert C. Cratch, for defendant Horace Mann
           Property and Casualty Insurance Company.

           DIETZ, Judge.

¶1         This appeal concerns the proper calculation of underinsured motorist or “UIM”

     coverage in a case involving both multiple underinsured tortfeasors and multiple

     UIM insurance policies.
                                      TUTTEROW V. HALL

                                        2022-NCCOA-300

                                       Opinion of the Court

¶2         The dispute centers on a provision of the Motor Vehicle Safety and Financial

     Responsibility Act addressing this issue. As with other portions of the Act, this

     statutory language is incorporated by law into every automobile insurance policy in

     our State.

¶3         The language provides that “if a claimant is an insured under the underinsured

     motorist coverage on separate or additional policies, the limit of underinsured

     motorist coverage applicable to the claimant is the difference between the amount

     paid to the claimant under the exhausted liability policy or policies and the total

     limits of the claimant’s underinsured motorist coverages as determined by combining

     the highest limit available under each policy.” N.C. Gen. Stat. § 20-279.21(b)(4).

¶4         Here, there were two negligent drivers who caused the accident, each with

     exhausted liability policies of $100,000. There were also two applicable UIM policies,

     each with $100,000 in UIM coverage. As explained below, the trial court properly

     applied the plain language of the statute and determined that the amount of UIM

     coverage available under this statutory calculation “is $0.00,” which is the difference

     between the $200,000 paid under the exhausted liability policies and the combined

     limits of the UIM policies.

¶5         The trial court’s calculation follows the statute’s plain language and is

     consistent with the purpose of underinsured motorist coverage identified in our

     State’s case law. We therefore affirm the trial court’s judgment.
                                         TUTTEROW V. HALL

                                           2022-NCCOA-300

                                          Opinion of the Court

                                     Facts and Procedural History

¶6            In 2014, Vivian Tutterow was killed in a car accident. At the time, Tutterow

       was a passenger in a car driven by Pamela Crump. For purposes of this declaratory

       judgment action, the parties stipulated that both Crump and Defendant Brian Hall,

       the driver of a second vehicle, negligently caused the accident.

¶7            The parties involved in this accident had the following relevant insurance

       coverage: Crump had an auto policy issued by Horace Mann with $100,000 per person

       liability limits and $100,000 per person UIM coverage. Hall had an auto policy issued

       by Nationwide with $100,000 per person liability limits.

¶8            Tutterow, as a passenger in Crump’s car, was covered under Crump’s $100,000

       per person UIM coverage. Tutterow also had an auto policy issued by State Farm

       with $100,000 per person UIM coverage.

¶9            In 2015, Plaintiff, as the administrator of Tutterow’s estate, brought a

       wrongful death action against Crump, Hall, and others. On 10 October 2016, Horace

       Mann tendered the $100,000 limits of its liability policy on behalf of Crump. On 18

       October 2016, Nationwide tendered the $100,000 limits of its liability policy on behalf

       of Hall.

¶ 10          Several weeks later, Plaintiff notified the UIM carriers of these tenders but

       advised that Plaintiff had not accepted the tendered liability limits. At that time, the
                                         TUTTEROW V. HALL

                                           2022-NCCOA-300

                                          Opinion of the Court

       two UIM carriers—Horace Mann and State Farm—did not advance coverage under

       the UIM policies.

¶ 11         In June 2017, Plaintiff informed the UIM carriers that he had accepted Horace

       Mann’s tender of the full $100,000 liability limit of Crump’s liability policy.

¶ 12         In September 2017, State Farm advanced $100,000 to Tutterow’s estate under

       its UIM policy while expressly reserving its “rights to recoup funds” should Plaintiff

       recover from Hall’s liability insurer, Nationwide, “whether such payments are made

       pursuant to a settlement, a judgement or otherwise.”

¶ 13         In July 2019, Plaintiff informed the UIM carriers that he reached a settlement

       with Hall that included a payment from Nationwide of the $100,000 limits of Hall’s

       liability policy. The following week, State Farm requested that Plaintiff reimburse

       the $100,000 that it had advanced in late 2017. Those funds were placed in escrow

       and Plaintiff brought this declaratory judgment action seeking a declaration of the

       UIM carriers’ coverage obligations and State Farm’s right to reimbursement.

¶ 14         The parties later filed cross-motions for summary judgment. After a hearing,

       the trial court entered an order granting summary judgment in favor of the UIM

       carriers on the ground that the amount of UIM coverage available “is $0.00.” Plaintiff

       timely appealed.
                                          TUTTEROW V. HALL

                                            2022-NCCOA-300

                                           Opinion of the Court

                                               Analysis

¶ 15         This case concerns a type of insurance coverage known as underinsured

       motorist or “UIM” coverage. UIM coverage serves “as a safeguard when tortfeasors’

       liability policies do not provide sufficient recovery.” North Carolina Farm Bureau

       Mut. Ins. Co., Inc. v. Lunsford, 378 N.C. 181, 2021-NCSC-83, ¶ 13. UIM coverage is

       governed by the Motor Vehicle Safety and Financial Responsibility Act—a lengthy,

       complicated statute that explains how UIM coverage and other related insurance

       operates. N.C. Gen. Stat. § 20-279.21. The provisions of this statute are “written into

       every policy of automobile insurance” as a matter of law. North Carolina Farm

       Bureau Mut. Ins. Co., Inc. v. Dana, 379 N.C. 502, 2021-NCSC-161, ¶ 9.

¶ 16         Under the statute, the calculation of applicable UIM coverage has three basic

       steps. First, the reviewing court must determine if a tortfeasor’s vehicle meets the

       definition of an “underinsured highway vehicle.” If so, the court must determine if

       the limits of that tortfeasor’s liability policy are exhausted. Finally, if those liability

       limits are exhausted, the court must calculate the amount of coverage that is

       available under the applicable UIM policy. Id. ¶ 11.

¶ 17         Here, the trial court concluded—and the parties concede—that the first two

       steps of this analysis are satisfied and that UIM coverage is therefore triggered. All

       that remains is the calculation of the amount of UIM coverage available.
                                        TUTTEROW V. HALL

                                             2022-NCCOA-300

                                            Opinion of the Court

¶ 18         The crux of this case is how to calculate that available UIM coverage when

       there are both multiple underinsured tortfeasors and multiple UIM insurance

       policies. Here, for example, there are two tortfeasors whose liability insurers

       exhausted their policy limits by tendering $100,000 each. There are also two UIM

       carriers that both provided Tutterow with UIM coverage of $100,000 per person.

¶ 19         The parties acknowledge that the calculation of UIM coverage in this scenario

       is governed by a specific section of the Motor Vehicle Safety and Financial

       Responsibility Act found in Section 20-279.21(b)(4) of our General Statutes:

                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 under the exhausted liability
                policy or policies and the limit of underinsured motorist coverage
                applicable to the motor vehicle involved in the accident.
                Furthermore, if a claimant is an insured under the underinsured
                motorist coverage on separate or additional policies, the limit of
                underinsured motorist coverage applicable to the claimant is the
                difference between the amount paid to the claimant under the
                exhausted liability policy or policies and the total limits of the
                claimant’s underinsured motorist coverages as determined by
                combining the highest limit available under each policy . . .

       N.C. Gen. Stat. § 20-279.21(b)(4).

¶ 20         Our State’s appellate courts have not yet interpreted how this statutory

       language applies in a case involving both multiple underinsured tortfeasors and

       multiple UIM insurance carriers. The parties acknowledge that we interpret this

       provision as we would any other statute—by first examining the plain language of
                                         TUTTEROW V. HALL

                                           2022-NCCOA-300

                                          Opinion of the Court

       the statute and then, if that language is ambiguous, turning to other interpretive

       tools. Dana, ¶ 16.

             We agree with the trial court that this statutory language is unambiguous and

       supported entry of summary judgment in favor of the UIM carriers. The first sentence

       of this provision addresses a scenario in which the claimant is covered by only one

       UIM policy: “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

       under the exhausted liability policy or policies and the limit of underinsured motorist

       coverage applicable to the motor vehicle involved in the accident.” N.C. Gen. Stat. § 20-

       279.21(b)(4) (emphasis added).

¶ 21         The word “claim” as used in this sentence means the assertion that the

       claimant “has sustained bodily injury” or is “injured” in an automobile collision. N.C.

       Gen. Stat. § 20-279.21(b)(3), (4). Moreover, the references to “underinsured motorist

       coverage” and “the limit of underinsured motorist coverage applicable to the motor

       vehicle involved in the accident”—with the word “coverage” in the singular—signals

       that there is only one UIM policy at issue, that being the UIM policy for the vehicle

       the claimant occupied at the time of the accident.

¶ 22         The second sentence, by contrast, addresses a scenario in which the claimant

       is covered by more than one UIM policy: “Furthermore, if a claimant is an insured

       under the underinsured motorist coverage on separate or additional policies, the limit
                                         TUTTEROW V. HALL

                                           2022-NCCOA-300

                                          Opinion of the Court

       of underinsured motorist coverage applicable to the claimant is the difference

       between the amount paid to the claimant under the exhausted liability policy or

       policies and the total limits of the claimant’s underinsured motorist coverages as

       determined by combining the highest limit available under each policy.” Id. (emphasis

       added).

¶ 23         The use of the transitional word “furthermore” indicates that this second

       sentence provides an additional factor or consideration that distinguishes it from the

       preceding statement. See Merriam-Webster’s Collegiate Dictionary 474 (10th ed.

       1993). That additional consideration—meaning the thing that distinguishes the

       second sentence from the first—is the existence of multiple UIM policies that apply

       to the claimant. This is confirmed by the grammar of this second sentence, which

       refers to the “total limits of the claimant’s underinsured motorist coverages” in the

       plural form, in contrast to the first sentence, which refers to the “limit of

       underinsured motorist coverage” in the singular.

¶ 24         In the scenario addressed in this second sentence, involving multiple

       applicable UIM policies, the statute provides an unambiguous method to calculate

       the applicable limit of combined UIM coverage: it is the difference between the total

       amount paid under all exhausted liability policies and the total limits of all applicable

       UIM policies.
                                         TUTTEROW V. HALL

                                           2022-NCCOA-300

                                          Opinion of the Court

¶ 25         The trial court properly applied this statutory provision here. The court

       calculated the total amount paid under the exhausted liability policies as $200,000

       and calculated the total limits of the claimant’s underinsured motorist coverages as

       $200,000. The court then determined that the total limits of UIM coverage is the

       difference between these two totals and, therefore, the “available UIM coverage is

       $0.00.” This determination properly applied the statute’s plain language and is

       correct.

¶ 26         Although we hold that the statute’s plain language is unambiguous and

       compels this result, we note that this interpretation also is consistent with the

       purpose of the statute. As noted above, UIM coverage serves “as a safeguard when

       tortfeasors’ liability policies do not provide sufficient recovery.” Lunsford, ¶ 13. The

       purpose of UIM coverage is to put the insured in a position where total insurance

       coverage for injuries sustained in an automobile accident is no less than the amount

       of UIM coverage. Nationwide Mut. Ins. Co. v. Haight, 152 N.C. App. 137, 142, 566

       S.E.2d 835, 838 (2002). That is precisely what the plain language of this statute

       accomplishes. Here, for example, the UIM carriers provided combined UIM coverage

       ensuring that, in the event of bodily injury or death in an auto accident, there would

       be at least $200,000 in available insurance coverage. That is the amount of liability

       coverage provided in this case. Accordingly, we affirm the trial court’s entry of

       summary judgment in favor of the UIM carriers on this issue.
                                         TUTTEROW V. HALL

                                           2022-NCCOA-300

                                          Opinion of the Court

¶ 27         Plaintiff also argues that the trial court’s order failed to acknowledge that

       State Farm waived its subrogation rights and thus cannot be entitled to

       reimbursement of the $100,000 in UIM coverage that it advanced while reserving a

       right to reimbursement.

¶ 28         Under the Motor Vehicle Safety and Financial Responsibility Act, no insurer

       “shall exercise any right of subrogation. . . where the insurer has been provided with

       written notice before a settlement between its insured and the underinsured motorist

       and the insurer fails to advance a payment to the insured in an amount equal to the

       tentative settlement within 30 days following receipt of that notice.” N.C. Gen. Stat.

       § 20-279.21(b)(4). Plaintiff contends that State Farm’s advance of its $100,000 in UIM

       coverage occurred many months after the tender of the full limits by the liability

       carriers, and thus waived State Farm’s subrogation rights as a matter of law.

¶ 29         The trial court properly determined that this statutory provision is

       inapplicable. As explained above, when the underlying liability insurers exhausted

       the limits of their two $100,000 policies by tendering the full limits, the UIM carriers

       had no duty to advance any payments because they owed nothing under their policies.

       Because State Farm did not have any obligation to advance payment under its UIM

       policy, the statutory provision governing waiver of subrogation rights upon failure to

       timely advance payment does not apply.
                                         TUTTEROW V. HALL

                                           2022-NCCOA-300

                                          Opinion of the Court

¶ 30         Plaintiff does not assert any other basis to challenge the trial court’s ruling

       with respect to State Farm’s right to reimbursement, and we therefore affirm this

       portion of the trial court’s order as well. See N.C. R. App. P. 28(b).

                                             Conclusion

¶ 31         We affirm the trial court’s order.

             AFFIRMED.

             Judges MURPHY and JACKSON concur.