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  "name": "COUNTY OF GUILFORD v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., and JEFFERSON INSURANCE COMPANY OF NEW YORK",
  "name_abbreviation": "County of Guilford v. National Union Fire Insurance",
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    "judges": [
      "Judge Lewis concurs.",
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    "parties": [
      "COUNTY OF GUILFORD v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., and JEFFERSON INSURANCE COMPANY OF NEW YORK"
    ],
    "opinions": [
      {
        "text": "WYNN, Judge.\nOn 15 January 1986, George Harris, an inmate in the Guilford County Jail, suffered severe injuries in an assault by another inmate. Mr. Harris died shortly after admission to Moses Cone Memorial Hospital in Greensboro, where his medical expenses totalled $28,585.61.\nMary Lee Harris, as Administratrix of the Estate of George Harris, brought an action in negligence against the inmate who assaulted Mr. Harris, the.Sheriff of Guilford County, and Guilford County. The Sheriff of Guilford County and Guilford County were covered by liability insurance policies with National Union Fire Insurance Company of Pittsburgh, Pennsylvania (\u201cNational Union\u201d) and Jefferson Insurance Company of New York (\u201cJefferson Insurance\u201d). Pursuant to a settlement agreement dated 29 August 1986, negotiated with the two insurance companies, Ms. Harris released all parties of liability in exchange for a lump sum payment of $61,414.39 plus the payment of the $28,585.61 in medical expenses incurred by Mr. Harris before his death. Guilford County had paid $22,450.61 of Mr. Harris\u2019 medical expenses prior to this release being signed. The lump sum payment to Ms. Harris and the balance of $6,135.00 owed for medical expenses were paid by the two insurance companies.\nGuilford County thereafter sought reimbursement from the insurance companies for the $22,450.61 and was denied coverage under both policies. The County next brought suit against both National Union and Jefferson Insurance, but later reached a settlement with National Union and voluntarily dismissed against that party.\nPrior to trial, Jefferson Insurance filed a motion for summary judgment on the following grounds: 1) Guilford County\u2019s voluntary payment of Mr. Harris\u2019 medical expenses violated the terms of the policy; 2) Guilford County was not an \u201cinsured\u201d under the terms of the policy; 3) the claim was excluded from coverage under the policy; and 4) the action was barred by the applicable statute of limitations. Following the granting of this motion by the trial court, Guilford County appealed to this Court.\nGuilford County\u2019s sole assignment of error challenges the trial court\u2019s award of summary judgment in favor of Jefferson Insurance. Summary judgment is proper if the record, viewed in the light most favorable to the nonmoving party, presents no genuine issue of material fact so that the moving party is entitled to judgment as a matter of law. Belmont Land and Inv. Co. v. Standard Fire Ins. Co., 102 N.C. App. 745, 748, 403 S.E.2d 924, 925 (1991). The County argues that its claim is not barred by the statute of limitations; it is an \u201cInsured\u201d and therefore covered under the policy; its payment to the hospital was not voluntary; and its claim is not excluded from coverage by the terms of the policy. In short, the County contends that there were no grounds upon which the trial court could have granted summary judgment to Jefferson Insurance. We agree.\nOur Supreme Court\u2019s recent decision in Rowan County Board of Education v. United States Gypsum Co., 332 N.C. 1, 418 S.E.2d 648 (1992), confirms that Guilford County\u2019s claim against Jefferson Insurance is not barred by the statute of limitations. The Rowan Court clearly set forth the rules with regard to the doctrine of nullum tempus occurrit regi: \u201cIf the function at issue is governmental, time limitations do not run against the State or its subdivisions unless the statute expressly includes the State. If the function is proprietary, time limitations do run against the State and its subdivisions unless the statute at issue expressly excludes the State.\u201d Id. at 9, 418 S.E.2d at 654 (emphasis in original). Inasmuch as we find that the Rowan decision is controlling on this issue, and we further note that the appellee conceded this point at oral argument, we conclude that Guilford County\u2019s claim is not barred by the statute of limitations.\nWe next address the question of whether Guilford County is covered by the Jefferson Insurance policy. Although the policy sets forth the \u201cNamed Insured\u201d as \u201cGuilford County Sheriffs Department,\u201d the policy includes in the definition of \u201cInsured\u201d \u201cthe political subdivisions in which the Named Insured is located.\u201d Guilford County fits within this definition and is therefore an \u201cInsured\u201d under the policy.\nGuilford County next asserts that its payment of Mr. Harris\u2019 medical expenses was not voluntary, and, therefore, not barred from coverage by the terms of the policy. The policy in question provides that \u201c[tjhe Insured shall not, except at his own expense, voluntarily make any payment, assume any obligation or incur any expense other than for first aid to others at the time of the accident.\u201d Thus, any voluntary payment made by Guilford County would not be covered. We find, however, that the payments made by Guilford County were made pursuant to a statutory obligation, and as such were not made voluntarily.\nNorth Carolina General Statutes provide that every county operating \u201ca local confinement facility shall develop a plan for providing medical care for prisoners in the facility. The plan . . . [s]hall provide for medical supervision of prisoners and emergency medical care for prisoners to the extent necessary for their health and welfare.\u201d N.C. Gen. Stat. \u00a7 153A-225(a)(2) (1991). The statutes also mandate that \u201c[i]n a medical emergency, the custodial personnel shall secure emergency medical care from a licensed physician according to the unit\u2019s plan for medical care. .. . The unit operating the facility shall pay the cost of emergency medical services.\u201d Id. \u00a7 153A-224(b) (emphasis added). This Court has recognized that \u201c[t]hese statutes require that a county provide emergency medical services to prisoners incarcerated in the county\u2019s jail and to pay for such services.\u201d University of North Carolina v. Hill, 96 N.C. App. 673, 675, 386 S.E.2d 755, 757, aff\u2019d, 327 N.C. 465, 396 S.E.2d 323 (1990) (emphasis added). Since the medical payments made by Guilford County were mandated by statute, we find that paying Mr. Harris\u2019 medical expenses was not voluntary, and, therefore, payment under the policy was not barred for this reason.\nThe County next contends its claim is not excluded from the coverage of the policy. Exclusion (c) of the subject policy states that the policy does not apply \u201c[t]o liability assumed by the Insured under any contract or agreement, except mutual law enforcement assistance agreements between political subdivisions.\u201d Jefferson Insurance argues that since the County had a contract with Moses Cone Memorial Hospital to provide medical care for prison inmates, the exclusion bars coverage of payments made under that contract. However, the County\u2019s liability for Mr. Harris\u2019 medical expenses was due not to its contract with the hospital, but rather to the statutory requirement that county prisons implement a plan for providing medical care to inmates. We find, therefore, that the County\u2019s claim is not barred by this policy exclusion.\nFinally, Guilford County contends that it was improper to grant summary judgment on the ground that liability for Mr. Harris\u2019 injuries had not been established. Under the subject policy, Jefferson Insurance contracted to \u201cpay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of negligent acts, errors, or omissions arising out of the performance of the Insured\u2019s duty to provide law enforcement with respect to the following perils: personal injury, bodily injury, property damage.\u201d Jefferson Insurance contends that since Guilford County\u2019s liability has not been judicially determined, and that since the release is \u201cnot to be construed as an admission of liability,\u201d it is under no obligation to reimburse Guilford County for the medical expenses incurred by Mr. Harris. We disagree.\nThe policy in question further provides that \u201cthe Company shall have the right and duty to defend any suit against the Insured seeking damages . . . and, may make such investigation and settlement of any claim or suit as it deems expedient.\u201d The duty to defend arises prior to an adjudication on the merits of the claim. W & J Rives, Inc. v. Kemper Ins. Group, 92 N.C. App. 313, 319, 374 S.E.2d 430, 434 (1988), disc. rev. denied, 324 N.C. 342, 378 S.E.2d 809 (1989). In the course of such defense, any attempt to settle the claim must be done in good faith. \u201cIt is a matter of common knowledge that fair and reasonable settlements can generally be made at much less than the financial burden imposed in litigating claims. . . . [C]ourts have consistently held that an insurer owes a duty to its insured to act deligently [sic] and in good faith in effecting settlements . . . .\u201d Alford v. Insurance Co., 248 N.C. 224, 229, 103 S.E.2d 8, 12 (1958).\nIn the subject case Jefferson Insurance, through its lawyers, participated in the negotiation of the settlement and ultimate release with Ms. Harris. The release provided that Ms. Harris would be paid one lump sum of $61,414.39, and, additionally, the medical expenses totalling $28,585.61 incurred by Mr. Harris would be paid. Jefferson Insurance then paid the lump sum and the outstanding balance on the medical charges. There seems to be no dispute that once the settlement agreement was entered into, Jefferson Insurance was liable for Guilford County\u2019s obligation under the agreement, despite the inclusion of the \u201cno admission of liability\u201d clause. At that point the County\u2019s outstanding obligation included the lump sum and what remained on the medical bills. Had the release only provided for the outstanding balance to be paid, the outcome might be different, but the release specifically provided for the payment of the entire $28,585.61. Guilford County paid part of the medical costs only because of its statutory obligation. Once Jefferson Insurance became liable for the payments, Guilford County was entitled to be reimbursed for the medical expenses it paid. \u201c[A]s plaintiff has paid what has now been either adjudicated or stipulated to be defendant\u2019s obligation, plaintiff is entitled to recover those monies by equitable subrogation, which is \u2018the mode which equity adopts to compel ultimate payment of a debt by one who injustice, equity, and good conscience ought to pay.\u2019 \u201d Nationwide Mutual Ins. Co. v. American Mutual Liability Ins. Co., 89 N.C. App. 299, 301, 365 S.E.2d 677, 679 (1988). We hold that where an insurance company has entered into a settlement agreement on behalf of the insured pursuant to a liability insurance policy, unless otherwise clearly agreed, the insurance company is liable for the insured\u2019s total obligation under that agreement, subject to the monetary limits of the policy. Because we have determined that the payments made by Guilford County were neither voluntary nor excluded by the terms of the policy at issue, Jefferson Insurance\u2019s refusal to reimburse Guilford County is unwarranted.\nFor the foregoing reasons we\nReverse the entry of summary judgment in favor of the defendant and\nRemand this case to the Superior Court of Guilford County for entry of summary judgment in favor of the plaintiff.\nJudge Lewis concurs.\nJudge Greene dissents.",
        "type": "majority",
        "author": "WYNN, Judge."
      },
      {
        "text": "Judge GREENE\ndissenting.\nI agree that plaintiffs action is not barred by the statute of limitations, that plaintiff is an \u201cinsured\u201d under the insurance policy at issue, that plaintiffs payment of medical expenses incurred by inmate George Harris (Harris) was not \u201cvoluntary\u201d as that term is used in the contract of insurance, and that policy exclusion (c) does not operate to exclude coverage of plaintiffs claim. However, I disagree with the majority\u2019s holding that, despite the fact that plaintiffs liability for Harris\u2019 injuries has not been established, summary judgment in favor of defendant was improper. To the contrary, because there has been no liability determination as to the cause of Harris\u2019 injuries and resulting medical expenses, defendant is not obligated under the terms of its insurance contract with plaintiff to reimburse plaintiff for the amount expended on medical bills for Harris.\nI am cognizant that under North Carolina law, in certain cases an insured may properly bring a claim against its indemnity or liability insurer to recover payments made by the insured for medical expenses incurred by an injured third party prior to the settlement of a negligence claim brought by the third party against the insured. See Blue Bird Cab Co. v. American Fidelity & Casualty Co., 219 N.C. 788, 15 S.E.2d 295 (1941). However, when, as in the instant breach of contract action, the liability insurance policy pursuant to which an insured seeks to recover prior payments contains a provision limiting coverage to damages which the insured become legally obligated to pay because of negligence, adjudication of the insured\u2019s negligence, or a stipulation thereto, is a prerequisite to its recovery from the insurer. Plaintiff acknowledges that its duty to pay Harris\u2019 medical expenses arose not by virtue of an adjudication of its negligence, but rather by statute. In fact, at the time that plaintiff filed its breach of contract action against defendant, plaintiff could not \u201cbecome legally obligated to pay . . . damages because of negligen[ce]\u201d related to the Harris incident because Harris\u2019 administratrix had released her right to bring a negligence action against plaintiff, and, even absent the release, the three-year statute of limitations for negligence claims had run. Furthermore, the release agreement on which the majority relies merely refers to \u201cthe payment by Releasees [Guilford County and Jefferson Insurance Company] of $28,585.61 in medical bills incurred as a result of the incident giving rise to this claim\u201d and in no way imposes the obligation to pay such expenses on defendant alone. Therefore, the trial court had no choice but to grant summary judgment for defendant.\nI note that, in my opinion, the majority\u2019s application of the doctrine of equitable subrogation is misplaced. Plaintiff in the instant case has not paid \u201cwhat has now been either adjudicated or stipulated to be defendant\u2019s obligation\u201d since there has been (1) no adjudication that defendant is obligated to pay the entire $28,585.61 in medical expenses, (2) no adjudication of plaintiff\u2019s negligence (thus triggering defendant\u2019s obligation to pay damages under the terms of the insurance contract), and (3) no stipulation by the parties that defendant is obligated to pay the entire amount of medical expenses. Accordingly, I would affirm the trial court\u2019s order.",
        "type": "dissent",
        "author": "Judge GREENE"
      }
    ],
    "attorneys": [
      "Guilford County Attorney\u2019s Office, by Jonathan V. Maxwell and J. Edwin Pons, for plaintiff-appellant.",
      "Nichols, Caffrey, Hill, Evans & Murrelle, by Richard L. Pinto and ToNola D. Brown, for defendant-appellee."
    ],
    "corrections": "",
    "head_matter": "COUNTY OF GUILFORD v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., and JEFFERSON INSURANCE COMPANY OF NEW YORK\nNo. 9118SC848\n(Filed 3 November 1992)\nJails, Prisons and Prisoners \u00a7 66 (NCI4th)\u2014 one inmate assaulted by another \u2014costs of medical care \u2014liability of insurance company\nThe trial court erred in granting summary judgment for defendant insurance company in plaintiff county\u2019s action to recover amounts paid by it for a prisoner\u2019s medical expenses incurred after he was assaulted by another inmate since the action was not barred by the statute of limitations; although the named insured was \u201cGuilford County Sheriff\u2019s Department,\u201d the policy included in the definition of \u201cinsured\u201d the political subdivisions in which the named insured was located; payments made by plaintiff were made pursuant to a statutory obligation and, as such, were not made voluntarily; plaintiff\u2019s claim was not barred by a policy exclusion stating that the policy did not apply \u201cto liability assumed by the Insured under any contract or agreement . . .\u201d; and an insurance company which has entered into a settlement agreement on behalf of the insured pursuant to a liability insurance policy, unless otherwise clearly agreed, is liable for the insured\u2019s total obligation under that agreement, subject to the monetary limits of the policy. N.C.G.S. \u00a7 153A-224(b).\nAm Jur 2d, Insurance \u00a7\u00a7 190, 461.\nPenal and Correctional Institutions \u00a7 191.\nJudge GREENE dissenting.\nAppeal by plaintiff from judgment entered 21 May 1991 in GUILFORD County Superior Court by Judge Julius B. Rousseau. Heard in the Court of Appeals 16 September 1992.\nGuilford County Attorney\u2019s Office, by Jonathan V. Maxwell and J. Edwin Pons, for plaintiff-appellant.\nNichols, Caffrey, Hill, Evans & Murrelle, by Richard L. Pinto and ToNola D. Brown, for defendant-appellee."
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