Court Opinion

ID: 9588570
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:35:51.312367+00
Date Added: 2024-06-11T09:43:18.279478
License: Public Domain

Justice Mitchell
dissenting.
For reasons well stated in Part III of the opinion of the majority, I agree that Talley had deviated materially from the per*564mission given him to use the vehicle in question, and that the standard omnibus clause of the Nationwide policy did not provide coverage for his use. I must respectfully dissent, however, from Part II of the majority opinion and from the result reached by the majority.
N.C.G.S. § 20-281 unambiguously provides in pertinent part that every “motor vehicle leased or rented must be covered by a policy of liability insurance insuring the owner and rentee or lessee . . . from any liability imposed by law for damages . . . caused by accident arising out of the operation of such motor vehicle . . . .” The clear legislative intent was to prevent any gap in North Carolina’s compulsory liability insurance program by requiring that the lessor maintain liability insurance on all rented or leased vehicles so as to provide coverage for all rentees and lessees who might not have other insurance. As this Court pointed out in American Tours, Inc. v. Liberty Mutual Ins. Co., 315 N.C. 341, 338 S.E. 2d 92 (1986), N.C.G.S. §§ 20-281 and 20-279.21 are parts of a legislative package designed to protect innocent citizens from financially irresponsible motorists. We clearly indicated in American Tours that the liability insurance carrier for the lessor may not escape its duty to provide coverage under any policy required by N.C.G.S. § 20-281 by showing that the use of the motor vehicle by the lessee was in direct violation of the terms of the lease. This being the established law, I believe that such insurance coverage must be held to remain in force and effect until the expiration of the term of the lease or an earlier express termination of the lease.
The evidence before the trial court in the present case tended to show that, on 2 April 1980, North Carolina National Bank sent a letter to Talley at his address as shown in the lease agreement. That letter informed Talley that he was in default under the lease agreement. It then continued by stating:
Accordingly, notice is herewith given that North Carolina National Bank makes demand that:
You pay the entire unpaid “net balance” of $6,570.40.
If the above demand is not met within five (5) days from this date, you are further advised to surrender to North Carolina *565National Bank any collateral which secured the account above identified.
Your failure to comply with this demand within the five days will necessitate our taking legal action which will result in additional expense to you.
This letter of 2 April 1980 to the defendant was stipulated in evidence.
For me, the question which must be answered prior to a proper resolution of this case is whether the quoted letter of 2 April 1980 from North Carolina National Bank to Talley was an effective termination of the lease prior to the expiration of its term. Certainly, the terms of the lease itself gave North Carolina National Bank the authority to terminate it by reason of the default by Talley. Although not entirely free from ambiguity, the letter of 2 April 1980, when read in context with the other evidence in this case, would have supported a determination by the trial court that North Carolina National Bank had given Talley specific notice of termination of the lease and, therefore, had effectively terminated the lease prior to the expiration of its term. However, the trial court did not specifically focus on this question and made no such determination. Therefore, I would reverse the decision of the Court of Appeals and remand this case to that court for its further remand to the Superior Court, Rockingham County, for appropriate findings and conclusions and the entry of judgment thereon.
Justice FRYE joins in this dissenting opinion.