Opinion
No. COA02-1310
Filed 1 July 2003 This case not for publication
Appeal by plaintiffs from order entered 17 May 2002 by Judge James E. Ragan, III in Lenoir County Superior Court. Heard in the Court of Appeals 10 June 2003.
Wallace, Morris Barwick, P.A., by P.C. Barwick, Jr., for plaintiffs-appellants. Maupin Taylor Ellis, P.A., by Elizabeth D. Scott and Susan L. Dunathan, for defendant William Gary Baker, d/b/a W. Gary Baker Insurance. Ragsdale Liggett PLLC, by Andrew C. Buckner, for defendant-appellee Wilshire Insurance Company.
Lenoir County No. 01 CVS 1333.
Universal Underwriters Insurance Company ("Universal"), Denis Michael Thompson ("Thompson"), and GS 2 of Kinston LLC, d/b/a Kinston Nissan-Lincoln ("Kinston Nissan") (collectively "plaintiffs") appeal from an order granting summary judgment in favor of William Gary Baker, d/b/a W. Gary Baker Insurance ("Baker") and Wilshire Insurance Company ("Wilshire") (collectively"defendants"). We affirm.
I. Background
Universal provided automobile liability coverage to Kinston Nissan from 1 December 1999 to 1 December 2000. Wilshire provided insurance to Thompson through Baker. On 20 June 2000, the Wilshire policy to Thompson was cancelled.
On 12 September 2000, Thompson signed a conditional sales agreement with Kinston Nissan to purchase a 1995 Mitsubishi. Thompson paid $1,000 down in the form of a trade-in. The remaining purchase price was to be financed through Wachovia Bank. Kinston Nissan issued Thompson a thirty day temporary tag and Thompson drove home in the vehicle.
Thompson represented to Kinston Nissan that he was insured through the Wilshire policy. The morning after the sale, Gene Tyndall, the sales representative for Kinston Nissan, called Baker, confirmed Thompson's insurance, and requested that Thompson's insurance be transferred from Thompson's old vehicle to the Mitsubishi. Baker completed a policy change request form which indicated the requested policy modifications. Baker did not learn that Wilshire had cancelled Thompson's policy until 15 September 2000.
At approximately 10:45 am on 13 September 2000, Thompson was involved in an accident with James Thomas, Jr. ("Thomas"). On 9 February 2001, Thomas sued Thompson, Baker, and Kinston Nissan alleging Thompson's negligence in the accident. On 28 September 2001, plaintiffs filed the present declaratory judgment action to determine Universal's rights, duties and obligations under its policy to Kinston Nissan. On 17 May 2002, the trial court granted summary judgment in favor of all defendants and declared that "Universal Underwriters Insurance policy #205501 issued to G S 2 of Kinston, LLC, d/b/a Kinston Nissan-Lincoln provides auto liability coverage in the amount of $30,000 per person, per accident with respect to the auto accident involving Denis Michael Thompson on September 13, 2000." Plaintiffs appeal.
II. Issues
Plaintiffs contend the trial court erred in granting summary judgment when (1) there is a defense to the statutory requirements and (2) whether Baker negligently failed to procure insurance for Thompson is a question of fact.
III. Standard of Review
Summary judgment is appropriate when there is no genuine issue of material fact and any party is entitled to judgment as a matter of law. N.C. Gen. Stat. § 1A-1, Rule 56(c) (2001).
IV. Statutory Coverage
N.C. Gen. Stat. § 20-75.1 provides:
Liability, collision, and comprehensive insurance on a vehicle sold and delivered conditioned on the purchaser obtaining financing for the purchaser of the vehicle shall be covered by the dealer's insurance policy until such financing is finally approved and execution of the manufacturer's certificate of origin or execution of the certificate of title. Upon final approval and execution of the manufacturer's certificate of origin or the certificate of title, and upon the purchaser having liability insurance on another vehicle, the delivered vehicle shall be covered by the purchaser's insurance policy beginning at the time of final financial approval and execution of the manufacturer's certificate of origin or the certificate of title. The dealer shall notify the insurance agency servicing the purchaser's insurance policy or the purchaser's insurer of the purchase on the day of, or if the insurance agency or insurer is not open for business, on the next business day following approval of the purchaser's financing and execution of the manufacturer's certificate of origin or the certificate of title.
Plaintiffs assert a defense to N.C. Gen. Stat. § 20-75.1, that "defendant Baker led Gene Tyndall to believe that the new vehicle was covered by insurance when in fact there was no such coverage." We disagree.
All parties agree that Thompson entered into a conditional sales agreement with Kinston Nissan. Kinston Nissan had not called Baker regarding Thompson's insurance at the time of the sales agreement. Kinston Nissan did not rely upon Baker's assertions upon entering into the sales agreement. The sales agreement was conditional upon obtaining both insurance and financing. At the time of the accident, Wachovia had not approved financing for the vehicle and no certificate of origin or certificate of title had been executed. N.C. Gen. Stat. § 20-75.1 expressly applies and requires the dealer's insurer, Universal, to provide coverage. Until such time as financing had been approved, Universal's coverage continued. Baker's representations are not a defense to the statutory coverage requirement by Universal. This assignment of error is overruled.
V. Negligent Failure to Procure
Plaintiffs contend the trial court erred in granting summary judgment because genuine issues of fact exist regarding whether Baker negligently failed to procure insurance for the Mitsubishi. We disagree.
Although our Courts may have recognized the tort of negligent failure to procure insurance, plaintiffs' complaint is a declaratory judgment action based on Universal's insurance policy. A negligence claim may not be asserted in a declaratory judgment action. See Strickland v. Town of Aberdeen, 124 N.C. App. 430, 433, 477 S.E.2d 218, 219 (1996) ("[A] negligence action, with unresolved issues of fact, cannot be properly decided under the Declaratory Judgment Act.") Further, plaintiffs have failed to include any allegations of negligent failure to procure insurance in the complaint or to argue it at the summary judgment hearing. The trial court did not err in granting summary judgment in favor of defendants.
VI. Conclusion
The trial court did not err in declaring that Universal's insurance policy provided coverage and in granting summary judgment in favor of defendants.
Affirm.
Chief Judge EAGLES and Judge STEELMAN concur.
Report per Rule 30(e).