Court Opinion

ID: 9581635
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:16:59.099816+00
Date Added: 2024-06-11T13:37:08.741722
License: Public Domain

Judge GREENE
dissenting.
I agree that plaintiffs action is not barred by the statute of limitations, that plaintiff is an “insured” under the insurance policy at issue, that plaintiffs payment of medical expenses incurred by inmate George Harris (Harris) was not “voluntary” as that term is used in the contract of insurance, and that policy exclusion (c) does not operate to exclude coverage of plaintiffs claim. However, I disagree with the majority’s holding that, despite the fact that plaintiffs liability for Harris’ injuries has not been established, summary judgment in favor of defendant was improper. To the contrary, because there has been no liability determination as to the cause of Harris’ injuries and resulting medical expenses, defendant is not obligated under the terms of its insurance contract with plaintiff to reimburse plaintiff for the amount expended on medical bills for Harris.
I am cognizant that under North Carolina law, in certain cases an insured may properly bring a claim against its indemnity or liability insurer to recover payments made by the insured for medical expenses incurred by an injured third party prior to the settlement of a negligence claim brought by the third party against the insured. See Blue Bird Cab Co. v. American Fidelity & Casualty Co., 219 N.C. 788, 15 S.E.2d 295 (1941). However, when, as in the instant breach of contract action, the liability insurance policy pursuant to which an insured seeks to recover prior payments contains a provision limiting coverage to damages which the insured become legally obligated to pay because of negligence, adjudication of the insured’s negligence, or a stipulation thereto, is a prerequisite to its recovery from the insurer. Plaintiff acknowledges that its duty to pay Harris’ medical expenses arose not by virtue of an adjudication of its negligence, but rather by statute. In fact, at the time that plaintiff filed its breach of contract action against defendant, plaintiff could not “become legally obligated to pay . . . damages because of negligen[ce]” related to the Harris incident because Harris’ administratrix had released her right to bring a negligence action against plaintiff, and, even absent the release, the three-year statute of limitations for negligence claims had run. Furthermore, the release agreement on which the majority relies merely refers *8to “the payment by Releasees [Guilford County and Jefferson Insurance Company] of $28,585.61 in medical bills incurred as a result of the incident giving rise to this claim” and in no way imposes the obligation to pay such expenses on defendant alone. Therefore, the trial court had no choice but to grant summary judgment for defendant.
I note that, in my opinion, the majority’s application of the doctrine of equitable subrogation is misplaced. Plaintiff in the instant case has not paid “what has now been either adjudicated or stipulated to be defendant’s obligation” since there has been (1) no adjudication that defendant is obligated to pay the entire $28,585.61 in medical expenses, (2) no adjudication of plaintiff’s negligence (thus triggering defendant’s obligation to pay damages under the terms of the insurance contract), and (3) no stipulation by the parties that defendant is obligated to pay the entire amount of medical expenses. Accordingly, I would affirm the trial court’s order.