Court Opinion

ID: 9589994
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:50:49.518604+00
Date Added: 2024-06-11T09:04:57.231108
License: Public Domain

Judge Greene
concurring in part and dissenting in part:
I agree with the majority that the workers’ compensation carrier (Reliance) has a lien (subject to section 97-10.2(j)) on uninsured *710motorist benefits paid to the estates of Ditillo, Clark and Stilwell (employees of Day & Zimmerman). I agree that Ditillo and Clark are not “persons insured” within the meaning of the Financial Responsibility Act (Act) and were properly denied uninsured benefits under the Liberty Mutual policy.

Policy Provisions

I also agree that neither the “limitation of liability” or “exclusionary” provisions of the State Farm and Liberty Mutual policies are effective to preclude payment of uninsured benefits. This Court has consistently held that a “limitation of liability” clause contained in a personal automobile policy is inconsistent with the Act and not enforceable, e.g., McMillian v. N.C. Farm Bureau Mut. Ins. Co., 125 N.C. App. 247, —, 480 S.E.2d 437, — (1997), to the extent of the mandatory minimum coverage required by the Act. See Government Employees Ins. Co. v. Herndon, 79 N.C. App. 365, 367, 339 S.E.2d 472, 473 (1986) (coverage above mandatory minimum is voluntary and governed by terms of policy). Although our courts have not addressed the validity of an “exclusionary” clause of the type contained in these policies, the rationale for rejecting the viability of the “limitation of liability” clause applies equally well to the “exclusionary” clause. In both instances the effect is to eliminate uninsured coverage if there is workers’ compensation coverage for the injuries.
In this case at the time the policies were issued the insurance companies had no obligation to provide uninsured coverage in excess of the minimum limits of $25,000. N.C.G.S. § 20-279.21(b)(3) (1961)1; N.C.G.S. § 20-279.5(c) (1993). Thus any uninsured coverage in excess of the mandatory $25,000 was voluntary and controlled by the “limitations of liability” and “exclusionary” provisions. I therefore agree with the trial court that the Stilwell and Clark uninsured claims must be limited to $25,000, as any additional uninsured coverage is barred by both the “limitation of liability” and “exclusionary” provisions *711because of the workers’ compensation payments to the Stilwell and Clark estates.

Section 97-10.2(j)

I also do not agree that the trial court did not have the discretion to determine the amount of the workers’ compensation lien on the uninsured benefits. Section 97-10.2(j) grants the trial court the authority to exercise its discretion in determining the amount of the workers’ compensation lien if the “judgment” against the negligent party is “insufficient to compensate the subrogation claim” of the workers’ compensation carrier. N.C.G.S. § 97-10.2Q) (1991). The amount of the “judgment” is determined by reducing the verdict by “the amount of the workers’ compensation benefits received” by the injured party. Hieb v. Lowery, 344 N.C. 403, 410, 474 S.E.2d 323, 327 (1996). In this case, there is no jury verdict and the parties stipulated that the trial court was to “treat” the case as though a judgment had been entered against the uninsured driver in an amount in excess of the combination of all uninsured and workers’ compensation benefits. In the Clark case the uninsured benefits (under the State Farm policy) are $25,000 and the workers’ compensation benefits (paid through the date of the trial) are $130,997.62 for a total of $155,997.62. In other words, in the Clark case the parties have stipulated to a verdict of $156,000 (an amount reasonably in excess of $155,997.62). The “judgment” (within the meaning of section 97-10.2(j) and Hieb) in the Clark case is therefore $25,002.38, determined by subtracting the amount of the workers’ compensation benefits ($130,997.62) from the amount of the verdict ($156,000). The judgment (in the Clark case) thus is “insufficient to compensate the subrogation claim” of the workers’ compensation carrier (Reliance) and the trial court had discretion to determine the amount of the workers’ compensation lien. In the Stilwell case, the record does not reveal the amount of workers’ compensation benefits received by the estate prior to the date of the trial. It is thus impossible to determine whether the “judgment” is sufficient or insufficient to compensate the workers’ compensation carrier. I would therefore remand the Stilwell case for a determination of the amount of workers’ compensation benefits received by the Stilwell estate as of the date of the declaratory judgment hearing before Judge Helms. After that amount is determined the trial court shall then apply the same formula utilized above (in the Clark case) to determine if the “judgment” is sufficient to compensate the subrogation claim of the workers’ compensation carrier.

*712
Summary

In summary, I would affirm the trial court’s order denying Ditillo and Clark’s claims under the Liberty Mutual policy. I would affirm the order of the trial court that Stilwell and Clark are entitled to uninsured benefits under their respective policies (Liberty Mutual and State Farm) in the amounts of $25,000.1 would reverse the finding of the trial court that it did not have discretion to apportion the uninsured proceeds pursuant to section 97-10.2(j) and would remand for the exercise of that discretion.

. This statute was amended in 1992 and now provides that if the insured named in the policy “does not reject uninsured motorist coverage and does not select different coverage limits, the amount of uninsured motorist coverage shall be equal to the highest limit of bodily injury and property damage liability coverage for any one vehicle in the policy.” N.C.G.S. § 21-279.21(b)(3) (1993). Under this statute the uninsured coverage is mandatory, at least to the extent the insured does not reject uninsured coverage and does not select an amount of uninsured coverage in excess of “the highest limit of bodily injury and property damage liability coverage for any one vehicle in the policy,” Id.; see Bray v. N.C. Farm Bureau Mut. Ins. Co., 341.N.C. 678, 685, 462 S.E.2d 650, 654 (1995).