Court Opinion

ID: 7395948
Source: CourtListenerOpinion
Date Created: 2022-07-29 01:15:55.744085+00
Date Added: 2024-06-11T16:21:48.053646
License: Public Domain

HUNTER, Judge, dissenting.
Because I disagree with the majority's holding that provisions of N.C. Gen.Stat. § 20-309(a1) should be read into every liability insurance policy on commercial vehicles as a matter of law, I respectfully dissent.
Best purchased a thirty-passenger bus for use in transporting members of his church. In June 2001, he went to plaintiff, an insurer, for liability insurance on the vehicle and was offered an application for a policy containing $750,000.000 in coverage, which he declined. Best then selected the amount of coverage himself - $50,000.00 per person and $100,000.00 per accident - and plaintiff issued a policy in those amounts. Best paid the premiums for the policy and was covered by it in October 2001, when he was involved in the accident at the root of this case in which Terry Armwood, Jr., was injured. Plaintiff sought a declaratory injunction from the trial court that the policy provided coverage of $50,000.00 per person and $100,000.00 per accident, as the policy stated on its face. The Armwoods sought a declaration that the policy provided coverage of $750,000.00. Based on its interpretation of the relevant statutes, the trial court denied plaintiff's motion and concluded that the policy should be reformed to provide coverage of $750,000.00.
"The primary goal of statutory construction is to effectuate the purpose of the legislature in enacting the statute[,]" and that purpose "`is first ascertained by examining the statute's plain language.'" Liberty Mut. Ins. Co. v. Pennington, 356 N.C. 571, 574, 573 S.E.2d 118, 121 (2002) (citation omitted). When that language is "`"clear and unambiguous,"'" the court is "`"without power to interpolate, or superimpose, provisions and limitations not contained therein."'" Id. at 575, 573 S.E.2d at 121 (citations omitted).
In general, insurance policies must be reformed when an applicable statute conflicts with the terms of the insurance policy; at that point, "the provisions of that statute become terms of the policy to the same extent as if they were written in it[.]" Baxley v. Nationwide Mutual Ins. Co., 334 N.C. 1, 6, 430 S.E.2d 895, 898 (1993). However, our Supreme Court has only reformed policies in cases where an insurer failed to comply with a requirement of the 1953 Act that places a direct burden on the insurer and policy, not the owner. See, e.g., Bray v. N.C. Farm Bureau Mut. Ins. Co., 341 N.C. 678, 685-86, 462 S.E.2d 650, 654 (1995) (invalidating family-owned vehicle exclusion to uninsured motorist coverage because section 20-279.21(b) mandated a minimum amount of coverage). "In the absence of any provision in the Financial Responsibility Act broadening the liability of the insurer, such liability must be measured by the terms of the policy as written." Younts v. Insurance Co., 281 N.C. 582, 585, 189 S.E.2d 137, 139 (1972).
As discussed below, in this case the terms of the policy do not conflict with the statute, because it is not the individual policy that must comply with the minimum requirements but rather the insured's overall coverage. As such, this Court should measure plaintiff's liability by the terms of the policy as written. Although such a result might not result in the complete protection of individuals from the risks associated with commercial vehicles, that issue is properly addressed by the legislature, not by this Court.
Two statutes are at issue in this case: the Vehicle Financial Responsibility Act of 1957 ("1957 Act") and the Financial Responsibility Act of 1953 ("1953 Act"). N.C. Gen Stat. § 20-309(a1) (2005), part of the 1957 Act, by its plain language puts the onus on owners to maintain required liability insurance on their vehicles: "An owner of a commercial motor vehicle, as defined in G.S. 20-4.01(3d), shall have financial responsibility for the operation of the motor vehicle in an amount equal to that required for for-hire carriers transporting nonhazardous property in interstate or *927foreign commerce in 49 C.F.R. § 387.9." Id. (emphasis added).
The 1953 Act specifically addresses individual policies rather than individual owners. It states that every owner's policy of liability insurance shall provide the following minimum coverage against loss from liability "for damages arising out of the ownership, maintenance or use" for the covered vehicle: $30,000.00 for injury or death to one person, $60,000.00 to two or more persons in one accident, and $25,000.00 for injury or destruction of property in one accident ($30/$60/$25). N.C. Gen.Stat. § 20-279.21(b)(2) (2005). The plain language of the statute itself actually inserts these specific amounts into every policy as a matter of law.
Because both acts have the same general purpose - namely, protecting the innocent from irresponsible drivers - the two should be read in conjunction, as the majority notes. "Statutes in pari materia are to be construed together, and it is a general rule that the courts must harmonize such statutes, if possible, and give effect to each[.]" Blowing Rock v. Gregorie, 243 N.C. 364, 371, 90 S.E.2d 898, 904 (1956).
However, the majority's holding reads the Acts together to create a mandate by the 1953 Act (which explicitly sets out the $30/$60/$25 minimums) that plaintiff's policy provide coverage in the amount specified by the 1957 Act ($750,000.00). This controverts the plain language of the two provisions of the 1957 Act at issue. Again, the plain language of N.C. Gen.Stat. § 20-309(a) and (a1) both put the onus on the owner. (N.C.Gen.Stat. § 20-309(a) states: "No motor vehicle shall be registered in this State unless the owner at the time of registration has financial responsibility for the operation of such motor vehicle, as provided in this Article.") Reading the two Acts in conjunction cannot mean eliminating this plain language by "superimpos[ing]" in the 1957 Act the language of the 1953 Act placing the onus on the insurer.
The trial court itself stated that:
Best, as the owner of the 1974 30 passenger bus, a commercial motor vehicle, had the duty and responsibility to obtain the applicable minimum liability coverage for the vehicle. G.S. 20-309(a1) places the duty to obtain and maintain the appropriate coverage, consistent with the use of the commercial vehicle, on the owner.
This conclusion of law explicitly looks to the 1957 Act and places the duty and responsibility for obtaining the correct minimum liability coverage on Best. Despite its own conclusion, however, the trial court then found that plaintiff had a duty to issue the policy for $750,000.00 and reformed the existing policy to reflect that level of liability. This finding incorrectly holds plaintiff responsible for the duty and responsibility the trial court had laid at Best's door.
Further, I see no statutory justification for the majority's holding that we must read a minimum $750,000.00 clause into this contract. As the majority states, our Courts have consistently held that the minimum coverage required by N.C. Gen.Stat. § 20-279.21(b) ($30/$60/$25) is written into every insurance policy as a matter of law. But note the plain language of this statute:
(b) [Each] owner's policy of liability insurance:
...
(2) Shall insure the person named therein . . . against loss from the liability imposed by law for damages . . . with respect to each such motor vehicle[] as follows: thirty thousand dollars ($30,000) because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, sixty thousand dollars ($60,000) because of bodily injury to or death of two or more persons in any one accident, and twenty-five thousand dollars ($25,000) because of injury to or destruction of property of others in any one accident[.]
N.C. Gen.Stat. § 20-279.21(b)(2). The statute, unlike N.C. Gen.Stat. § 20-309(a1), specifically addresses an element that every policy must contain. Clearly, legislative intent was that this statute should act to reform any policy that was not in line with these statutory minimums ($30/$60/$25). As mentioned, N.C. Gen.Stat. § 20-309(a1) sets out the minimum liability insurance responsibility of the owner of a commercial vehicle.
*928Had the legislature intended this particular provision to reform all policies not in line with the minimums set out for commercial vehicles ($750,000.00), it could easily have done so by adding to section 20-309(a1) similar construction and language as that used by section 20-279.21(b)(2) requiring all policies to have the $30/$60/$25 minimum. Had the legislature intended this reformation, it could also have simply amended section 20-279.21(b) in the 1953 Act with such language, inserting in all commercial vehicle policies the $750,000.00 minimum requirement. Since the legislature did neither, this Court should not impose such a requirement.
Defendants further argue that the language of N.C. Gen.Stat. § 20-309(b) indicates that only one policy may be used to meet the minimum coverage ("[f]inancial responsibility shall be a liability insurance policy ..." (emphasis added)), agreeing with the trial court's conclusion that plaintiff's issuance of a policy below statutory minimums ($750,000.00) was an "invalid and inappropriate choice[.]" However, the 1953 Act, with which this statute must be read in conjunction, allows a commercial vehicle owner to meet the requirements of liability coverage "by the policies of one or more insurance carriers which policies together meet such requirements." N.C. Gen.Stat. § 20-279.21(j). Thus, again, the onus is placed on Best, not plaintiff, to obtain the appropriate minimum coverage.
Defendants also argue that, because the Farm Bureau policy did not meet the statutory minimums, Best would not have been able to register his motor vehicle ("[n]o motor vehicle shall be registered in this State unless the owner at the time of registration has financial responsibility for the operation of such motor vehicle"). N.C. Gen.Stat. § 20-309(a). This argument fails because, again, Best could have obtained the statutory minimum of coverage from multiple insurers. The record does not indicate that plaintiff issued a policy that falsely stated the amount of Best's coverage or inappropriately certified Best for registration purposes; any error in registering the vehicle made by the State cannot be laid at plaintiff's feet.
In sum, the majority's holding puts an onus on insurance companies that I do not believe is warranted by the statutes. The plain language of the 1957 Act places on the owner the onus for ensuring that minimum statutory requirements for liability insurance are met.
This Court should not disturb the contract between the parties and the motion for summary judgment should have been granted. If the legislature had intended for commercial vehicles to be covered by only one liability insurance policy with a minimum coverage of $750,000.00, it could easily have done so.
It is important to note that the legislature's purpose in creating these Acts was clearly to protect the public by having higher mandatory minimum liability insurance coverage for commercial vehicles because the potential for damage to property and individuals is higher. However, the legislature addressed that concern by putting the onus for obtaining adequate coverage on the owner. In this particular case, unfortunately, that purpose was not effected, but it is the legislature's provenance to correct this problem; it is not for the courts to impose a correction.
I would reverse the trial court's order partially granting the Armwoods' motion for summary judgment because, based on the applicable statutes comprising the 1953 and 1957 Acts, it was error for the trial court to reform the insurance policy at issue to reflect $750,000.00 in liability coverage. Further, since Best had no obligation to purchase his entire minimum coverage from one insurer, and plaintiff had no obligation to issue a policy for the statutory minimum, I would reverse and remand the trial court's denial of plaintiff's motion for summary judgment.