Opinion
No. COA10-484
Filed 1 February 2011 This case not for publication
Appeal by Plaintiff and Defendants Jane Elizabeth Sechrist, Justin Paul Fryar, and Paul S. Fryar from order entered 15 December 2009 by Judge Edgar B. Gregory in Guilford County Superior Court. Heard in the Court of Appeals 3 November 2010.
Frazier, Hill Fury, RLLP, by Torin L. Fury, for Plaintiff-Appellant Integon National Insurance Company. Egerton Associates, P.A., by Kurt B. Aktug, for Defendant-Appellants Jane Elizabeth Sechrist, Justin Paul Fryar, and Paul S. Fryar. Pinto Coates Kyre Brown, PLLC, by David L. Brown, for Defendant-Appellee North Carolina Farm Bureau Mutual Insurance Company, Inc.
Guilford County No. 09 CVS 3085.
I. Procedural History and Factual Background
On 15 March 2008, Defendant Justin Paul Fryar ("Justin") sustained serious injuries in an automobile accident while riding as a passenger in a vehicle owned and operated by Landon Lee Isley ("Landon"). At the time of the accident, Landon had liability insurance coverage through a Personal Auto Policy with Defendant North Carolina Farm Bureau Mutual Insurance Company, Inc. ("Farm Bureau").
Farm Bureau had also issued a Personal Auto Policy to Defendant Paul S. Fryar ("Mr. Fryar"), Justin's father, which was in effect at the time of the accident and provides underinsured motorists ("UIM") coverage to Justin for the accident. Plaintiff Integon National Insurance Company ("Integon") had issued a Personal Auto Policy to Defendant Jane Elizabeth Sechrist ("Ms. Sechrist"), Justin's mother, which was in effect at the time of the accident and potentially provides UIM coverage to Justin for the accident. Additionally, Farm Bureau had issued a Business Auto Policy to Mr. Fryar which covered two dump trucks used by Mr. Fryar in his business and which was also in effect at the time of the accident.
Farm Bureau states in its Motion for Summary Judgment that it is "undisputed" that the Personal Auto Policy issued by Farm Bureau to Mr. Fryar "provides underinsured motorist coverage to Defendant Justin Paul Fryar" in relation to the accident at issue.
The record does not reflect whether Ms. Sechrist's Personal Auto Policy actually provides UIM coverage to Justin for the accident.
On or about 29 January 2009, Integon filed a declaratory judgment action against Defendants seeking a determination of whether the Business Auto Policy issued by Farm Bureau to Mr. Fryar provided UIM coverage to Justin for his injuries resulting from the accident. On 16 February 2009, Ms. Sechrist, Mr. Fryar, and Justin filed an Answer and Crossclaim, seeking a declaration that the Business Auto Policy provided UIM coverage to Justin.
On 16 March 2009, Farm Bureau filed an answer, counterclaim, and crossclaim denying that the Business Auto Policy issued to Mr. Fryar provided UIM coverage and seeking a declaration that the policy did not provide UIM coverage to Justin.
On 2 October 2009, Farm Bureau filed a motion for summary judgment. On 15 December 2009, the trial court entered an order granting summary judgment in favor of Farm Bureau and declaring that the Business Auto Policy "cannot be stacked or otherwise applied to provide any [UIM] coverage to Justin Paul Fryar as a result of the March 15, 2008 motor vehicle accident described herein." From the trial court's order, Integon, Ms. Sechrist, Mr. Fryar, and Justin (collectively, "Appellants") appeal.
II. Discussion
Appellants contend that the trial court erred in granting summary judgment in favor of Farm Bureau. For the reasons stated herein, we affirm the judgment of the trial court.
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." N.C. Gen. Stat. § 1A-1, Rule 56(c) (2009). When considering a summary judgment motion, "all inferences of fact . . . must be drawn against the movant and in favor of the party opposing the motion." Caldwell v. Deese, 288 N.C. 375, 378, 218 S.E.2d 379, 381 (1975) (citation and quotation marks omitted). We review a trial court's order granting or denying summary judgment de novo. See Builders Mut. Ins. Co. v. N. Main Constr., Ltd., 361 N.C. 85, 88, 637 S.E.2d 528, 530 (2006) (citing Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470, 597 S.E.2d 674, 693 (2004)). "Under a de novo review, the court considers the matter anew and freely substitutes its own judgment" for that of the lower tribunal. In re Greens of Pine Glen Ltd., 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003).
Appellants first argue that the terms of the Business Auto Policy provide UIM coverage to Justin for the 15 March 2008 motor vehicle accident. We need not address Appellants' argument, however, because even assuming arguendo that Justin is covered under the Business Auto Policy, we conclude that the coverage provided under that policy is not available in this case to indemnify Justin for his injuries.
The Business Auto Policy has an "Other Insurance" clause which provides
E. . . .
1. . . .
If there is other applicable insurance available under one or more policies or provisions of coverage:
. . . .
b. Any insurance we provide with respect to a vehicle:
(1) The Named Insured does not own. . . .
. . . .
shall be excess over any other collectible uninsured motorists insurance providing coverage on a primary basis.
In this case, as Justin was riding in a vehicle which Mr. Fryar did not own when the accident occurred, any UIM coverage applicable to Justin under the Business Auto Policy is secondary to the UIM coverage provided by Ms. Sechrist's and Mr. Fryar's Personal Auto Policies. Although Appellants argue that it is "absurd" that Justin "would have a better result if no other policy provided him Underinsured Motorists Coverage" and "note that Paul S. Fryar, Justin Paul Fryar, and Elizabeth Sechrist were willing in oral argument [before the trial court] to forego coverage under the other policies to obtain coverage under the Business Auto Policy[,]" this Court may not alter the terms of the Business Auto Policy to allow Appellants to reach their desired result.
Moreover, even though the UIM coverage provided under the Business Auto Policy theoretically may be available to Justin after the coverage provided by Ms. Sechrist's and Mr. Fryar's Personal Auto Policies is exhausted, such "combining" or "stacking" of policies is governed by the North Carolina Motor Vehicle Financial Responsibility Act. See N.C. Gen. Stat. § 20-279.21 (2009). N.C. Gen. Stat. § 20-279.21(b)(4) instructs this Court as to whether interpolicy stacking for UIM coverage is applicable to any claim:
In any event, the limit of underinsured motorist coverage applicable to any claim is determined to be the difference between the amount paid to the claimant under the exhausted liability policy or policies and the limit of underinsured motorist coverage applicable to the motor vehicle involved in the accident. Furthermore, if a claimant is an insured under the underinsured motorist coverage on separate or additional policies, the limit of underinsured motorist coverage applicable to the claimant is the difference between the amount paid to the claimant under the exhausted liability policy or policies and the total limits of the claimant's underinsured motorist coverages as determined by combining the highest limit available under each policy; provided that this sentence shall apply only to insurance on nonfleet private passenger motor vehicles. . . .
N.C. Gen. Stat. § 20-279.21(b)(4) (2009) (emphasis added). Thus, under the plain terms of the statute, UIM coverage under a business auto policy can be "stacked" or "combined" with UIM coverage under a personal auto policy "only when the coverage is nonfleet and the vehicle covered is of the private passenger type." North Carolina Farm Bureau Mut. Ins. Co. v. Stamper, 122 N.C. App. 254, 258, 468 S.E.2d 584, 586 ("[W]e conclude that interpolicy stacking is available only when the coverage is nonfleet and the vehicle covered is of the private passenger type."), disc. review denied, 343 N.C. 513, 472 S.E.2d 17 (1996).
Fleet coverage is available only if five or more vehicles are owned by a named insured. N.C. Gen. Stat. § 58-40-10(2) (2009). Moreover, a "private passenger motor vehicle" is defined as:
a. A motor vehicle of the private passenger or station wagon type that is owned or hired under a long-term contract by the policy named insured and that is neither used as a public or livery conveyance for passengers nor rented to others without a driver; or
b. A motor vehicle that is a pickup truck or van that is owned by an individual or by husband and wife or individuals who are residents of the same household if it:
1. Has a gross vehicle weight as specified by the manufacturer of less than 10,000 pounds; and
2. Is not used for the delivery or transportation of goods or materials unless such use is (i) incidental to the insured's business of installing, maintaining, or repairing furnishings or equipment, or (ii) for farming or ranching.
N.C. Gen. Stat. § 58-40-10(1) (2009).
In this case, the Business Auto Policy afforded coverage for only two vehicles, and, thus, the coverage was "nonfleet." However, the two vehicles covered under the Business Auto Policy are not "private passenger or station wagon type" vehicles, pickup trucks, or vans weighing less than 10,000 pounds. Instead, the vehicles are both dump trucks, each weighing over 10,000 pounds. Accordingly, as Appellants concede, the two dump trucks covered by the Business Auto Policy are not "private passenger vehicle[s.]" Therefore, N.C. Gen. Stat. § 20-279.21(b)(4) expressly prohibits combining the UIM coverage under the Business Auto Policy with the UIM coverage provided under the Farm Bureau Personal Auto Policy or the Integon Personal Auto Policy. See Stamper, 122 N.C. App. at 258, 468 S.E.2d at 586 ("[T]he vehicle was not of the private passenger type, and therefore interpolicy stacking is unavailable."). As the parties agree that the UIM coverage provided under the Personal Auto Policy issued to Mr. Fryar applies to the accident at issue, the Business Auto Policy issued to Mr. Fryar "cannot be stacked or otherwise applied to provide UIM coverage in this case." Id. at 259, 468 S.E.2d at 587; see also Aetna Casualty Surety Co. v. Fields, 105 N.C. App. 563, 569, 414 S.E.2d 69, 73 ("[D]efendants-appellants are denied the benefits of stacking because the insured vehicle is not of the private passenger type required by [N.C. Gen. Stat.] § 20-279.21(b)(4)."), disc. review denied, 331 N.C. 383, 417 S.E.2d 788 (1992).
Accordingly, the judgment of the trial court is AFFIRMED.
Judges STEELMAN and HUNTER, JR. concur.
Report per Rule 30(e).