{ "id": 8520858, "name": "UNITED SERVICES AUTOMOBILE ASSOCIATION, Plaintiff v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY and WARDEN MOTORS, INC., d/b/a Clemmons Traders, Defendants", "name_abbreviation": "United Services Automobile Ass'n v. Universal Underwriters Insurance", "decision_date": "1991-10-01", "docket_number": "No. 9021SC1266", "first_page": "206", "last_page": "211", "citations": [ { "type": "official", "cite": "104 N.C. App. 206" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "93 ALR2d 1047", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": -1 }, { "cite": "322 S.E.2d 623", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "pin_cites": [ { "page": "627" } ], "opinion_index": 0 }, { "cite": "71 N.C. App. 498", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525805 ], "year": 1984, "pin_cites": [ { "page": "503" } ], "opinion_index": 0, "case_paths": [ "/nc-app/71/0498-01" ] }, { "cite": "152 S.E.2d 436", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1967, "opinion_index": 0 }, { "cite": "269 N.C. 341", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8563605 ], "weight": 2, "year": 1967, "opinion_index": 0, "case_paths": [ "/nc/269/0341-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 20-279.21", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 1989, "pin_cites": [ { "page": "(b)(2)" }, { "page": "(b)(2)" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 474, "char_count": 10459, "ocr_confidence": 0.756, "pagerank": { "raw": 4.916392172006044e-07, "percentile": 0.9341268545000114 }, "sha256": "7d9b9de2471543b83e1af13a60c4cfc0ebda84381cd2de5036bfba97234458f6", "simhash": "1:b92378d2a214b3cf", "word_count": 1681 }, "last_updated": "2023-07-14T22:39:04.224888+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges COZORT and ORR concur." ], "parties": [ "UNITED SERVICES AUTOMOBILE ASSOCIATION, Plaintiff v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY and WARDEN MOTORS, INC., d/b/a Clemmons Traders, Defendants" ], "opinions": [ { "text": "WYNN, Judge.\nThis appeal arises out of an accident involving an automobile owned by Warden Motors, but driven by Sanford E. Isenhour (\u201cIsenhour\u201d). At the time of the accident, plaintiff United Services Automobile Association (\u201cUS A A\u201d), insured Isenhour while defendant Universal Underwriters Insurance Company (\u201cUNIVERSAL\u201d) provided coverage for Warden Motors. USAA instituted this declaratory judgment action seeking a declaration that the \u201cGarage Liability Policy\u201d issued by UNIVERSAL provided primary coverage for the accident.\nThe facts indicate that on 27 January 1988, Isenhour went to defendant Warden Motors for the purpose of purchasing a truck. Isenhour was given permission to test drive a 1981 Ford truck. During the test drive, Isenhour struck the rear end of a stopped Cadillac owned by Rebecca Kaye (\u201cKaye\u201d), but being operated by Mortimer R. Shapiro (\u201cShapiro\u201d).\nAs a result of the accident, Shapiro made a personal injury claim against Isenhour, and USAA settled the claim for $2,000. Kaye filed a subsequent lawsuit for the damage to the Cadillac. Following UNIVERSAL\u2019s refusal to reimburse USAA for the payment to Shapiro or to pay Kaye\u2019s damage claim, this action resulted. After reviewing each of the relevant provisions in the respective policies, the trial court concluded that UNIVERSAL\u2019s policy provided primary coverage. From the entry of this declaration, UNIVERSAL appeals.\nThe sole issue presented by this appeal is whether the trial court erred in concluding the insurance coverage provided by UNIVERSAL was primary, and the USAA policy was secondary. However, before moving into an analysis of the ultimate issue, we must first decide if Isenhour is in fact an \u201cinsured\u201d under both policies. Isenhour\u2019s USAA policy provides coverage to the following \u201ccovered persons\u201d:\n\u201cCovered person\u201d as used in this Part means:\n1. You or any family member for the ownership, maintenance or use of any auto.\nSince the USAA policy was issued to Isenhour personally, he is clearly a \u201ccovered person\u201d under the terms of his own USAA policy. Moreover, as indicated by both the language of this policy and the actions of USAA, the applicability of the USAA policy is not affected by the fact that Isenhour was operating a non-owned vehicle at the time of the accident.\nThe terms of Warden Motors\u2019 insurance policy issued by UNIVERSAL also reflect that Isenhour is an insured. The UNIVERSAL policy provides:\nInsuring Agreement\nWE will pay all sums the INSURED legally must pay as damages (including punitive damages where insurable by law) because of INJURY to which this insurance applies' caused by an OCCURRENCE arising out of GARAGE OPERATIONS or AUTO Hazard.\nH= * *\n\u201cAuto HAZARD\u201d means the ownership, maintenance, or use of any AUTO YOU own or which is in YOUR care, custody or control and:\n(1) used for the purpose of GARAGE OPERATIONS or\n(2) used principally in GARAGE OPERATIONS with occasional use for other business or non-business purposes or\n(3) furnished for the use of any person or organization.\n* * *\nWho Is An Insured\nM= * *\nWith respect to the Auto HAZARD:\n1. YOU;\n2. Any of YOUR partners, paid employees, directors, stockholders, executive officers, a member of their household or a member of YOUR household, while using an AUTO covered by this Coverage Part, or when legally responsible for its use. The actual use of the AUTO must be by YOU or within the scope of YOUR permission;\n3. Any other person or organization required by law to be an INSURED while using an AUTO covered by this Coverage Part within the scope of YOUR permission.\nThe language contained in subsections 1. and 2. of \u201cWHO Is An INSURED\u201d clearly shows that Isenhour was an insured under the UNIVERSAL policy; after all, Isenhour was using the automobile with Warden Motors permission. In addition, N.C. Gen. Stat. \u00a7 20-279.21(b)(2) (1989) provides that Isenhour, as a person using the automobile with permission, is covered by the UNIVERSAL policy.\nWe now turn to the ultimate issue in this case \u2014 Which of the two- policies is the primary insurance covering Isenhour\u2019s accident?\nWhen construing insurance policies, each policy must be examined separately and irrespective of the other in order to determine its effect on the other. Allstate Insurance Co. v. Shelby Mutual Insurance Co., 269 N.C. 341, 152 S.E.2d 436 (1967). Isenhour\u2019s USAA insurance provides the following when there is another policy covering a car not owned by Isenhour:\nOther Insurance\nIf there is other applicable liability insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for a vehicle you do not own shall be excess over any other collectible insurance.\n(Emphasis added.) This language shows that USAA will not be liable for primary coverage if some other insurance policy covering the non-owned car provides \u201ccollectible insurance.\u201d By its terms, the coverage provided by the USAA policy is excess whenever its insured operates a non-owned automobile and when there is other collectible insurance available.\nWarden Motors\u2019 UNIVERSAL insurance policy also contains a provision concerning overlapping insurance policies:\nOther Insurance \u2014 The insurance afforded by this Coverage Part is primary, except it is excess:\n(1) for Product Related Damages and Legal Damages;\n(2) for any person or organization who becomes an INSURED under this Coverage Part as required by law. (Emphasis added.)\nUNIVERSAL contends that Isenhour was \u201crequired by law\u201d to be an insured under its policy and thus the \u201cOther Insurance\u201d provision contained in its policy renders UNIVERSAL\u2019s coverage secondary to USAA\u2019s. We disagree.\nWe recognize that UNIVERSAL is \u201crequired by law\u201d to insure Isenhour under N.C. Gen. Stat. \u00a7 20-279.21(b)(2) (1989). We also recognize that the UNIVERSAL policy states that an insured includes \u201c[a]ny other person . . . required by law to be an INSURED while using an AUTO covered by this Coverage Part within the scope of YOUR permission.\u201d However, we find that the undefined and ambiguous language \u201crequired by law\u201d contained in the UNIVERSAL policy serves only as a limitation to the statutory amount of coverage set out in section 20-279.21(b)(2) relating to an owner\u2019s policy of liability insurance. It is well settled that \u201cif there is any doubt concerning the true meaning of a policy clause, the doubt is to be resolved against the insurer, who authored it.\u201d Akzona, Inc. v. American Credit Indem. Co., 71 N.C. App. 498, 503, 322 S.E.2d 623, 627 (1984). Having determined the phrase \u201crequired by law\u201d to be ambiguous, we find it necessary to read it out of UNIVERSAL\u2019s policy. When viewed after deletion of the ambiguous term, the UNIVERSAL policy states that an \u201cinsured\u201d includes \u201c[a]ny person USING An Auto covered by this Coverage Part within the scope of [Warden Motors\u2019] permission.\u201d After removing the ambiguous language, UNIVERSAL\u2019s \u201cOTHER INSURANCE\u201d clause clearly provides that UNIVERSAL\u2019s coverage is primary in regard to Isenhour.\nThe terms of the USAA policy also reflect that the UNIVERSAL policy is primary. The USAA policy provides that USAA\u2019s coverage is not primary for any vehicle not owned by Isenhour if there exists other \u201ccollectible insurance.\u201d Thus the existence of the other collectible insurance policy (UNIVERSAL) is the event which prevents the USAA policy from operating at all with reference to Isenhour. See Allstate Insurance Co. v. Shelby Mutual Insurance Company, 269 N.C. 341, 152 S.E.2d 436 (1967).\nOther authorities in the field of insurance add support to the decision that we reach today:\nIt thus has been held that where the owner of an automobile or truck has a policy with an omnibus clause, and the additional insured also has a non-ownership policy which provides that it shall only constitute excess coverage over and above any other valid, collectible insurance, the owner\u2019s insurer has the primary liability. In such case, the liability of the excess insurer does not arise until the limits of the collectible insurance under the primary policy have been exceeded. It should be noted that under this rule, the courts give no application to the other insurance clause in the primary policy, which provides that if the additional insured has other valid and collectible insurance, he shall not be covered by the primary policy.\nThat is because the insurance under the excess coverage policy is not regarded as other collectible insurance, as it is not available to the insured until the primary policy has been exhausted. Or, to put it another way, a non-ownership clause, with an excess coverage provision, does not constitute other valid and collectible insurance within the meaning of a primary policy with an omnibus clause.\n8A Appleman, Insurance Law and Practice \u00a7 4909.45 (emphasis added).\nFor these reasons, we hold that the UNIVERSAL policy provided primary coverage to Isenhour. The decision of the trial court is,\nAffirmed.\nJudges COZORT and ORR concur.", "type": "majority", "author": "WYNN, Judge." } ], "attorneys": [ "Nichols, Caffrey, Hill, Evans & Murrelle, by Karl N. Hill, Jr., for plaintiff-appellee.", "Petree, Stockton & Robinson, by James H. Kelly, Jr., for defendant-appellant." ], "corrections": "", "head_matter": "UNITED SERVICES AUTOMOBILE ASSOCIATION, Plaintiff v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY and WARDEN MOTORS, INC., d/b/a Clemmons Traders, Defendants\nNo. 9021SC1266\n(Filed 1 October 1991)\nInsurance \u00a7 92.1 (NCI3d)\u2014 test drive of vehicle \u2014 garage liability insurance \u2014 driver\u2019s insurance \u2014primary and excess coverage\nA dealer\u2019s garage liability policy provided primary coverage and the driver\u2019s own automobile policy provided excess coverage for an accident that occurred while the driver was test driving a vehicle owned by the dealer. Ambiguous language in the \u201cother insurance\u201d clause of the garage liability policy that its coverage was excess for any person who becomes an insured as \u201crequired by law\u201d served only as a limitation to the statutory amount of coverage set out in N.C.G.S. \u00a7 20-279.21(b)(2) relating to an owner\u2019s policy of liability insurance and did not render coverage under the dealer\u2019s policy excess in this instance.\nAm Jur 2d, Automobile Insurance \u00a7\u00a7 217, 432-434.\nLiability insurance of garages, motor vehicle repair shops and sales agencies, and the like. 93 ALR2d 1047.\nAppeal by defendant from Order entered 2 October 1990 in FORSYTH County Superior Court by Judge James A. Beaty, Jr. Heard in the Court of Appeals 6 June 1991.\nNichols, Caffrey, Hill, Evans & Murrelle, by Karl N. Hill, Jr., for plaintiff-appellee.\nPetree, Stockton & Robinson, by James H. Kelly, Jr., for defendant-appellant." }, "file_name": "0206-01", "first_page_order": 234, "last_page_order": 239 }