Court Opinion

ID: 9348618
Source: CourtListenerOpinion
Date Created: 2022-12-20 14:08:44.189981+00
Date Added: 2024-06-11T16:42:29.793677
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                        2022-NCCOA-556

                                            No. COA22-82

                                      Filed 16 August 2022

     Wake County, No. 21 CVS 10088

     NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, INC.,
     Plaintiff,

                   v.

     MATTHEW BRYAN HEBERT, Defendant.

             Appeal by plaintiff from order entered 21 December 2021 by Judge Vince M.

     Rozier, Jr. in Wake County Superior Court. Heard in the Court of Appeals 25 May

     2022.

             William F. Lipscomb for plaintiff-appellant.

             Law Offices of James Scott Farrin, by Preston W. Lesley, for defendant-appellee.

             GORE, Judge.

¶1           North Carolina Farm Bureau Mutual Insurance Company, Inc. (“plaintiff”)

     appeals from the Order Denying Plaintiff’s Motion for Judgment on the Pleadings

     and Granting Judgment on the Pleadings for Defendant. We affirm.

                                       I.    Background

¶2           On 21 October 2020, Matthew Bryan Hebert was a passenger in his 2004

     Chevrolet car. Sincere Corbett was driving Mr. Hebert’s 2004 Chevrolet east on
                       N.C. FARM BUREAU MUT. INS. CO., INC. V. HEBERT

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     highway N.C. 42 in Johnston County, North Carolina. Jamal Direll Hicks, Jr. and

     Chase Everette Hawley were also passengers in Mr. Hebert’s 2004 Chevrolet. Mr.

     Hebert’s 2004 Chevrolet collided with a vehicle owned and operated by William

     Rayvoin Coats. Mr. Corbett and Mr. Hicks were killed in the collision. Mr. Hebert,

     Mr. Hawley, and Mr. Coats sustained significant injuries.

¶3         Mr. Hebert’s vehicle was covered by a personal auto insurance policy issued by

     plaintiff to Mr. Hebert (“Mr. Hebert’s policy”). Mr. Hebert’s policy provided bodily

     injury liability coverage of $50,000 per person / $100,000 per accident, and

     underinsured motorists (“UIM”) coverage of $50,000 per person / $100,000 per

     accident. Plaintiff tendered the $100,000 per accident limit of the liability coverage

     for Mr. Hebert’s policy to the four claimants. The claimants agreed to divide the

     $100,000 per accident limit as follows:

                  Matthew Bryan Hebert                        $100.00
                  The Estate of Jamal Direll Hicks, Jr.             $49,500.00
                  Chase Everette Hawley                             $ 49,500.00
                  William Rayvoin Coats                             $ 900.00

¶4         On 21 October 2020, Mr. Hebert also qualified as an insured of the UIM

     coverage of a personal auto policy issued by plaintiff to Mr. Hebert’s parents, Bryan

     J. Hebert and Kristie M. Hebert (“the parents’ policy”). The parents’ policy provides

     UIM coverage of $100,000 per person / $300,000 per accident and medical payments

     coverage of $2,000.
                         N.C. FARM BUREAU MUT. INS. CO., INC. V. HEBERT

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                                        Opinion of the Court

¶5            On 29 July 2021, plaintiff filed a Complaint for Declaratory Judgment. In its

     complaint, plaintiff alleged that the UIM coverage of Mr. Hebert’s policy does not

     apply to Mr. Hebert’s claim because Mr. Hebert’s 2004 Chevrolet is not an

     underinsured motor vehicle for Mr. Hebert’s claim under his policy. Plaintiff also

     alleged that the “multiple claimant exception” to the definition of underinsured motor

     vehicle, found in N.C. Gen. Stat. § 20-279.21(b)(4), does not apply to Mr. Hebert’s

     claim under the parents’ policy because Mr. Hebert’s 2004 Chevrolet was not insured

     under the liability coverage of the parents’ policy. Plaintiff alleged that the amount

     of UIM coverage available to Mr. Hebert under the parents’ policy is $99,900

     ($100,000 per person UIM limit minus $100 from Mr. Hebert’s liability coverage).

     Plaintiff sought declaratory relief requesting the trial court enter judgment declaring

     the only insurance coverage Mr. Hebert is entitled to recover from plaintiff related to

     the 21 October 2020 collision is the $99,900 UIM coverage from the parents’ policy.

¶6            On 15 September 2021, Mr. Hebert filed his Answer. Mr. Hebert’s Answer

     alleges that the 2004 Chevrolet is an underinsured motor vehicle as defined by North

     Carolina’s Financial Responsibility Act. Mr. Hebert admitted that the 2004 Chevrolet

     satisfied the definition of an underinsured motor vehicle under the parents’ policy but

     denied plaintiff’s claims that the multiple claimant exception does not apply to his

     claim.

¶7            Plaintiff moved for judgment on the pleadings. On 21 December 2021, the trial
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                                       Opinion of the Court

     court denied plaintiff’s Motion for Judgment on the Pleadings. The trial court

     concluded that Mr. Hebert’s policy does provide UIM coverage for Mr. Hebert’s claim

     and entered Judgment on the Pleadings in favor of Mr. Hebert. Plaintiff filed a timely

     Notice of Appeal on 28 December 2021.

                                     II.     Discussion

¶8         We review de novo a trial court’s order granting judgment on the pleadings.

     CommScope Credit Union v. Butler & Burke, LLP, 369 N.C. 48, 51, 790 S.E.2d 657,

     659 (2016) (citation omitted). In considering a motion for judgment on the pleadings,

                  all well pleaded factual allegations in the nonmoving
                  party’s pleadings are taken as true and all contravening
                  assertions in the movant’s pleadings are taken as false. As
                  with a motion to dismiss, the trial court is required to view
                  the facts and permissible inferences in the light most
                  favorable to the nonmoving party. A Rule 12(c) movant
                  must show that the complaint fails to allege facts sufficient
                  to state a cause of action or admits facts which constitute a
                  complete legal bar to a cause of action.

     Id. at 51-52, 790 S.E.2d at 659-60 (cleaned up).

¶9         On appeal, plaintiff argues that the trial court erred in denying plaintiff’s

     Motion for Judgment on the Pleadings, granting Judgment on the Pleadings for Mr.

     Hebert, and declaring that Mr. Hebert’s policy provides UIM coverage for Mr.

     Hebert’s claim. More specifically, plaintiff argues that the 2004 Amendment to N.C.

     Gen. Stat. § 20-279.21(b)(4) (commonly referred to as the multiple claimant

     exception) prevents Mr. Hebert’s 2004 Chevrolet from being an underinsured vehicle
                            N.C. FARM BUREAU MUT. INS. CO., INC. V. HEBERT

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                                             Opinion of the Court

       for Mr. Hebert’s claim under his own policy that insured that vehicle because the

       UIM limits of Mr. Hebert’s policy are not greater than the bodily injury liability limits

       of his policy.

¶ 10          Section 20-279.21(b)(4) defines an underinsured motor vehicle as follows:

                        An “underinsured motor vehicle,” as described in
                        subdivision (3) of this subsection, includes an
                        “underinsured highway vehicle,” which means a highway
                        vehicle with respect to the ownership, maintenance, or use
                        of which, the sum of the limits of liability under all bodily
                        injury liability bonds and insurance policies applicable at
                        the time of the accident is less than the applicable limits of
                        underinsured motorist coverage for the vehicle involved in
                        the accident and insured under the owner’s policy.

       N.C. Gen. Stat. § 20-279.21(b)(4) (2021). The 2004 Amendment/multiple claimant

       exception reads as follows:

                        For purposes of an underinsured motorist claim asserted
                        by a person injured in an accident where more than one
                        person is injured, a highway vehicle will also be an
                        “underinsured highway vehicle” if the total amount
                        actually paid to that person under all bodily injury liability
                        bonds and insurance policies applicable at the time of the
                        accident is less than the applicable limits of underinsured
                        motorist coverage for the vehicle involved in the accident
                        and insured under the owner’s policy. Notwithstanding the
                        immediately preceding sentence, a highway vehicle shall
                        not be an “underinsured motor vehicle” for purposes of an
                        underinsured motorist claim under an owner’s policy
                        insuring that vehicle unless the owner’s policy insuring
                        that vehicle provides underinsured motorist coverage with
                        limits that are greater than that policy’s injury liability
                        limits.
                           N.C. FARM BUREAU MUT. INS. CO., INC. V. HEBERT

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                                          Opinion of the Court

       N.C. Gen. Stat. § 20-279.21(b)(4). Plaintiff contends that the second sentence of the

       2004 Amendment prevents Mr. Hebert’s vehicle from being an underinsured motor

       vehicle for Mr. Hebert’s claim under his own policy that insured the 2004 Chevrolet,

       because the UIM limits of Mr. Hebert’s policy are not greater than the bodily injury

       liability limits of his policy.

¶ 11          Our analysis is guided by the “avowed purpose” of the Financial Responsibility

       Act, which is:

                     to compensate the innocent victims of financially
                     irresponsible motorists. The Act is remedial in nature and
                     is to be liberally construed so that the beneficial purpose
                     intended by its enactment may be accomplished. The
                     purpose of the Act, we have said, is best served when every
                     provision of the Act is interpreted to provide the innocent
                     victim with the fullest possible protection.

       Liberty Mut. Ins. Co. v. Pennington, 356 N.C. 571, 573-74, 573 S.E.2d 118, 120 (2002)

       (cleaned up). In liberally construing the Act, this Court has declined to apply the

       multiple claimant exception in a way which would reduce compensation to innocent

       victims and conflict with the avowed purpose of the Act. Nationwide Affinity Ins. Co.

       of Am. v. Le Bei, 259 N.C. App. 626, 634, 816 S.E.2d 251, 257 (2018).

¶ 12          The Financial Responsibility Act permits interpolicy stacking of UIM coverage

       to calculate the “applicable limits of underinsured motorist coverage for the vehicle

       involved in the accident.” N.C. Farm Bureau Mut. Ins. Co. v. Bost, 126 N.C. App. 50-

       51, 483 S.E.2d 452, 458 (1997). “After stacking, the parties use the stacked amount
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                                         Opinion of the Court

       to determine if the tortfeasor’s vehicle is an underinsured highway vehicle, under

       N.C. Gen. Stat. § 20-279.21(b)(4).” Le Bei, 259 N.C. App. at 630, 816 S.E.2d at 254

       (citing Bost, 126 N.C. App. at 51, 483 S.E.2d at 458).

¶ 13         This Court has held that the multiple claimant exception is not triggered

       “simply because there were two injuries in an accident.” Integon Nat’l Ins. Co. v.

       Maurizzo, 240 N.C. App. 38, 44, 769 S.E.2d 415, 420 (2015). Instead, the Court limited

       the exception’s applicability to “when the amount paid to an individual claimant is

       less than the claimant’s limits of UIM coverage after liability payments to multiple

       claimants.” Id. at 44, 769 S.E.2d at 420-21.

¶ 14         Additionally, in Le Bei, this Court interpreted the multiple claimant exception

       in a manner that would not limit the recovery of innocent occupants of a tortfeasor’s

       vehicle. See Le Bei, 259 N.C. App. at 634, 816 S.E.2d at 257. In the case sub judice,

       plaintiff contends Le Bei was decided incorrectly.

¶ 15         In Le Bei, an individual was driving their vehicle with five passengers in the

       vehicle. Id. at 627, 816 S.E.2d at 252. The driver maintained an insurance policy with

       liability limits of $50,000 per person / $100,000 per accident and UIM coverage with

       limits of $50,000 per person / $100,000 per accident. Id. at 627, 816 S.E.2d at 253.

       The driver’s reckless driving resulted in an accident with two other vehicles. Id. Two

       of the passengers suffered personal injuries from the accident and the other three

       passengers died because of their injuries suffered in the accident. Id. The plaintiff
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       insurance company distributed the $100,000 liability insurance between the estates

       of the deceased passengers and the drivers of the two additional vehicles involved in

       the accident. Id. The plaintiff in Le Bei claimed that the passengers were not able to

       recover the difference between the amounts received under the liability coverage and

       the per person limits of the UIM coverage due to the multiple claimant exception in

       N.C. Gen. Stat. § 20-279.21(b)(4). This Court, in following relevant precedent, held

       that the multiple claimant exception did not apply, and the deceased claimants were

       entitled to recover UIM coverage from their own policies and UIM coverage from the

       tortfeasor’s policy. Id. at 634, 816 S.E.2d at 251.

¶ 16         The case sub judice presents a similar factual scenario to Le Bei, in that a

       plaintiff insurance company is arguing that the multiple claimant exception prevents

       an innocent occupant of a vehicle driven by the tortfeasor from stacking and

       recovering UIM coverage from multiple insurance policies. In following this Court’s

       precedent, we hold that Mr. Hebert is entitled to stack insurance policies and the

       multiple claimant exception does not apply to the present case.

¶ 17         Because we hold the multiple claimant exception does not apply, the trial court

       properly held Mr. Herbert is entitled to recover UIM coverage from his insurance

       policy and the parents’ insurance policy. Accordingly, the trial court properly granted

       Judgment on the Pleadings in favor of Mr. Hebert and properly denied plaintiff’s

       Motion for Judgment on the Pleadings.
         N.C. FARM BUREAU MUT. INS. CO., INC. V. HEBERT

                         2022-NCCOA-556

                        Opinion of the Court

AFFIRMED.

Judge WOOD concurs.

Judge ARROWOOD dissents by separate opinion.
        No. COA22-82 – N.C. Farm Bureau Mut. Ins. Co. v. Hebert

             ARROWOOD, Judge, dissenting.

¶ 18         I respectfully dissent from the majority’s holding that the multiple claimant

       exception does not apply. This case concerns defendant’s underinsured motorist

       claim under his own policy, and accordingly I would hold that the multiple claimant

       exception applies, and that defendant’s vehicle does not qualify as an “underinsured

       motor vehicle” as defined by N.C. Gen. Stat. § 20-279.21(b)(4).

¶ 19         The statute defines an “underinsured motor [or highway] vehicle” in two

       categories. The first definition includes highway vehicles where “the sum of the limits

       of liability under all bodily injury liability bonds and insurance policies applicable at

       the time of the accident is less than the applicable limits of underinsured motorist

       coverage for the vehicle involved in the accident and insured under the owner’s

       policy.” N.C. Gen. Stat. § 20-279.21(b)(4) (2021). In this case, defendant’s insurance

       policy provided bodily injury liability coverage of $50,000 per person and $100,000

       per accident, with equal coverage limits of underinsured motorist coverage.

       Accordingly, because the sum of liability limits for bodily injury was equal to the

       applicable limits of underinsured motorist coverage for the vehicle involved and

       defendant’s policy, defendant’s vehicle does not qualify as an underinsured motor

       vehicle under the first definition.

¶ 20         The second definition, also referred to as the multiple claimant exception,

       provides that, in accidents with more than one person injured, a highway vehicle is

       underinsured “if the total amount actually paid to the person under all bodily injury
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                                           2022-NCCOA-556

                                       ARROWOOD, J., dissenting

       liability bonds and insurance policies applicable at the time of the accident is less

       than the applicable limits of underinsured motorist coverage for the vehicle involved

       in the accident and insured under the owner’s policy.”          N.C. Gen. Stat. § 20-

       279.21(b)(4). However, a vehicle is not included in this definition “unless the owner’s

       policy insuring that vehicle provides underinsured motorist coverage with limits that

       are greater than that policy’s bodily injury liability limits.” Id. (emphasis added).

¶ 21         This case concerns defendant’s underinsured motorist claim under his own

       policy. Pursuant to the second sentence of the multiple claimant exception, in an

       uninsured motorist claim under an owner’s policy, the owner’s underinsured motorist

       coverage limits must be “greater than that policy’s bodily injury liability limits.”

       Defendant’s policy for that vehicle, however, provided underinsured motorist

       coverage with limits that were equal to that policy’s bodily injury liability limits.

¶ 22         Although the majority holds that defendant’s vehicle qualifies as an

       underinsured motor vehicle after inter-policy stacking with his parents’ policy limits,

       I believe the multiple claimant exception applies and that defendant was not entitled

       to stack insurance policies.    The General Assembly contemplated underinsured

       motorist claims under an owner’s policy and specifically confined the limit coverage

       comparison to the owner’s policy. N.C. Gen. Stat. § 20-279.21(b)(4) (“Notwithstanding

       the immediately preceding sentence, a highway vehicle shall not be an ‘underinsured

       motor vehicle’ for purposes of an underinsured motorist claim under an owner’s policy
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                                          2022-NCCOA-556

                                      ARROWOOD, J., dissenting

       insuring that vehicle unless the owner’s policy insuring that vehicle provides

       underinsured motorist coverage with limits that are greater than that policy’s injury

       liability limits.” (emphasis added)). Because this case involves an underinsured

       motorist claim under the owner’s policy insuring the vehicle involved in the accident,

       the statute requires a comparison of coverage limits within that policy.

¶ 23         Additionally, I believe this case is distinguishable from Nationwide Affinity

       Ins. Co. of Am. v. Le Bei, which the majority cites as a “similar factual scenario.” In

       Le Bei, several passengers were injured or killed in a multi-vehicle accident and

       subsequently brought underinsured motorist claims under the tortfeasor’s policy.

       Nationwide Affinity Ins. Co. of Am. v. Le Bei, 259 N.C. App. 626, 627, 816 S.E.2d 251,

       253 (2018). None of the claimants were the owner of the vehicle, nor were the claims

       under their own policies. Id. at 627, 816 S.E.2d at 252-53. This Court held that the

       multiple claimant exception did not apply and that the defendants were permitted to

       recover underinsured motorist coverage under the driver’s policy. Id. at 634, 816

       S.E.2d at 257.

¶ 24         Although this case is similar in that defendant was a passenger at the time of

       the accident, he was a passenger in his own vehicle and has brought a claim under

       his own policy for that vehicle, not under the tortfeasor’s policy. Because defendant

       was the owner of the vehicle and brought an underinsured motorist claim under his

       own policy, I believe the second sentence of the multiple claimant exception applies
                         N.C. FARM BUREAU MUT. INS. CO., INC. V. HEBERT

                                           2022-NCCOA-556

                                       ARROWOOD, J., dissenting

       and that the trial court was not permitted to stack defendant’s policy limits with the

       limits of his parents’ policy. Although inter-policy stacking is generally permitted as

       part of the statute’s “avowed purpose” of compensating “the innocent victims of

       financially irresponsible motorists[,]” Liberty Mut. Ins. Co. v. Pennington, 356 N.C.

       571, 573, 573 S.E.2d 118, 120 (2002) (citation and quotation marks omitted),

       considering multiple insurance policies in this particular type of claim is

       impermissible pursuant to the statute. I believe Le Bei is factually distinct and not

       controlling in this case.

¶ 25         Because this case involves an underinsured motorist claim under the owner’s

       policy, the statute, specifically the second sentence of the multiple claimant

       exception, must be strictly applied here. For the foregoing reasons, I would reverse

       the trial court’s order and I respectfully dissent.