{
  "id": 11915984,
  "name": "DAVID L. HENDRICKSON, Plaintiff v. JAMES L. LEE, NATIONWIDE MUTUAL INSURANCE COMPANY, C/S SOVRAN CREDIT CORPORATION, PENNSYLVANIA MANUFACTURERS ASSOCIATION INSURANCE COMPANY and NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, Defendants",
  "name_abbreviation": "Hendrickson v. Lee",
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  "docket_number": "No. 9310SC651",
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    "judges": [
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    "parties": [
      "DAVID L. HENDRICKSON, Plaintiff v. JAMES L. LEE, NATIONWIDE MUTUAL INSURANCE COMPANY, C/S SOVRAN CREDIT CORPORATION, PENNSYLVANIA MANUFACTURERS ASSOCIATION INSURANCE COMPANY and NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, Defendants"
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        "text": "JOHN, Judge.\nIn this declaratory judgment action, defendant Pennsylvania Manufacturers Association Insurance Company (PMA) appeals the trial court\u2019s entry of summary judgment in favor of plaintiff David L. Hendrickson (plaintiff). The court\u2019s ruling was based upon its determination that PMA policy number BAP 159000 758451 9 (the PMA policy) provided plaintiff with underinsured motorist (UIM) coverage up to the limits of bodily injury liability coverage established in the policy. PMA argues, however, that the court erred in not finding that its insured, defendant C/S Sovran Credit Corporation (Sovran), had previously rejected UIM coverage equal to the liability limits and instead selected UIM coverage in the amount of $60,000.00. We disagree with PMA\u2019s contentions.\nPertinent factual and procedural information is as follows: On 23 October 1990, plaintiff was seriously injured in an automobile collision caused by the failure of defendant James L. Lee (Lee) to stop his vehicle at a stop-light. When the accident occurred, plaintiff was operating a 1985 Plymouth owned by his employer, defendant Sovran. This automobile was covered by the PMA policy, a general commercial insurance policy issued to Sovran in January 1990. Lee was insured on the date of the collision by Nationwide Mutual Insurance Company (Nationwide) under a personal automobile liability policy.\nSeeking recovery for his injuries (including amputation of one leg), plaintiff filed a negligence action against Lee in Edgecombe County Superior Court on 14 November 1991. Nationwide subsequently accepted liability on Lee\u2019s behalf and tendered its limits of $100,000.00 to plaintiff. Plaintiff thereafter notified PMA of his claim for UIM benefits under the PMA policy.\nOn 19 December 1991, citing PMA\u2019s denial of UIM coverage in excess of $60,000.00, plaintiff filed the instant action for declaratory relief against PMA and North Carolina Farm Bureau Mutual Insurance Company (Farm Bureau). In his complaint, plaintiff alleged his damages exceeded the $100,000.00 submitted by Nationwide and requested a declaration that the amount of UIM coverage available to him under the PMA policy was equal to the limits of bodily injury liability coverage established within that policy.\nFarm Bureau\u2019s answer, filed 11 February 1992, admitted issuance of several policies in effect on the accident date which provided UIM coverage for certain members of plaintiff\u2019s family. However, Farm Bureau asked the court to declare that plaintiff was entitled to UIM coverage at limits of $1,000,000.00 under the PMA policy, and further that PMA\u2019s UIM coverage be deemed primary to whatever coverage, if any, the court found to be provided by Farm Bureau\u2019s various policies.\nPMA\u2019s answer asserted that Sovran specifically \u201crejected underin-sured motorists coverage for any amounts over $60,000\u201d as reflected on the policy\u2019s declarations page and as evidenced by Sovran\u2019s April 1989 execution of a standard rejection form (the rejection form). PMA thereafter requested the court\u2019s declaration that the policy provided plaintiff no more than $60,000.00 UIM coverage.\nOn 17 March 1992, plaintiff moved for summary judgment pursuant to N.C.R. Civ. P. 56 (1990) \u201con the issue of the underinsured motorist coverage afforded by [PMA].\u201d PMA likewise moved for summary judgment on 16 April 1992. After a hearing held 29 April 1992, the court granted plaintiff\u2019s motion and denied that of PMA. Included in the court\u2019s order was the following language:\nIt is therefore ordered:\n3. That PMA motor vehicle policy no. BAP 159000 758451 9 provides underinsured motorist coverage for damages sustained by plaintiff in the motor vehicle wreck of October 23, 1990.\n4. That the limits of underinsured motorist coverage in PMA motor vehicle policy no. BAP 159000 758451 9 are equal to the limits of bodily injury liability coverage in that policy.\n5. That the limits of underinsured motorist coverage in PMA motor vehicle liability policy no. BAP 159000 758451 9 are One Million Dollars (1,000,000.00).\nPMA contends the trial court erred by determining that the policy provided plaintiff with UIM coverage equal to that policy\u2019s $1,000,000.00 bodily injury liability limits. Through three interrelated assignments of error, PMA argues Sovran had previously rejected liability limits UIM coverage and selected UIM coverage in the amount of $60,000.00. Limiting our holding to the circumstances of the case sub judice, we disagree.\nSummary judgment is a procedural device designed to permit penetration of an unfounded claim or defense in advance of trial, allowing for summary disposition in either party\u2019s favor when a fatal weakness in the claim or defense is exposed. See, e.g., Thompson v. Insurance Co., 44 N.C. App. 668, 672, 262 S.E.2d 397, 400 (citing Moore v. Fieldcrest Mills, Inc., 296 N.C. 467, 470, 251 S.E.2d 419, 422 (1979)), disc. review denied, 300 N.C. 202, 269 S.E.2d 620 (1980). Summary judgment is \u201can appropriate procedure in a declaratory judgment action,\u201d Montgomery v. Hinton, 45 N.C. App. 271, 273, 262 S.E.2d 697, 698 (1980) (citations omitted), but is only properly granted when the \u201cpleadings, 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.\u201d See Rule 56(c). Accordingly, we must examine the evidence herein to determine whether it reveals a genuine issue of material fact regarding the amount of UIM coverage provided in the policy; if not, the trial court properly granted plaintiff judgment as a matter of law. See, e.g., Oliver v. Roberts, 49 N.C. App. 311, 314, 271 S.E.2d 399, 401 (1980), disc. review denied, 276 S.E.2d 283 (1981) (citation omitted).\nPMA initially contends plaintiff was not afforded UIM coverage equal to the liability limits contained in his employer\u2019s policy because Sovran specifically rejected that amount of coverage in April 1989. PMA also maintains the validity of Sovran\u2019s rejection was not affected by use of a form differing from that promulgated in 1986 by the North Carolina Rate Bureau (the Rate Bureau). Because these contentions involve overlapping questions, we will discuss them jointly.\nWe note at the outset that \u201c[w]hen examining cases to determine whether insurance coverage is provided by a particular automobile liability insurance policy, careful attention must be given to the type of coverage, the relevant statutory provisions, and the terms of the policy.\u201d Smith v. Nationwide Mutual Ins. Co., 328 N.C. 139, 142, 400 S.E.2d 44, 47, reh\u2019g denied, 328 N.C. 677, 403 S.E.2d 514 (1991). In the case sub judice, the type of coverage at issue is UIM and the governing statute is the version of N.C. Gen. Stat. \u00a7 20-279.21(b)(4) in effect at the time of the incidents giving rise to the instant action. See N.C. Gen. Stat \u00a7 20-279.21(b)(4) (1988).\nThe Financial Responsibility Act (the Act), which includes G.S. \u00a7 20-279.21(b)(4), is a remedial statute which must be liberally construed in order to achieve the \u201cbeneficial purpose intended by its enactment.\u201d Sutton v. Aetna Casualty & Surety Co., 325 N.C. 259, 265, 382 S.E.2d 759, 763 (citation omitted), reh\u2019g denied, 325 N.C. 437, 384 S.E.2d 546 (1989). It is well-established that \u201c[t]he purpose of [the Act] ... is the protection of innocent victims who may be injured by financially irresponsible motorists.\u201d Proctor v. N.C. Farm Bureau Mutual Ins. Co., 324 N.C. 221, 224, 376 S.E.2d 761, 763 (1989) (citation omitted). As our Supreme Court has stated, the Act\u2019s purpose is \u201cbest served when the statute is interpreted to provide the innocent victim with the fullest possible protection\u201d from the negligent acts of an underinsured motorist. Id. at 225, 376 S.E.2d at 764 (emphasis added). Further, the provisions of the Act \u201care \u2018written\u2019 into every automobile liability policy as a matter of law, and, when the terms of [a] policy conflict with the statute, the provisions of the statute will prevail.\u201d Insurance Co. v. Chantos, 293 N.C. 431, 441, 238 S.E.2d 597, 604 (1977) (citations omitted).\nG.S. \u00a720-279.21(b)(4) provided as follows at the time of plaintiff\u2019s accident:\n(b) Such owner\u2019s policy of liability insurance:\n(4) Shall. . . provide underinsured motorist coverage, to be used only with policies that are written at limits that exceed those prescribed by subdivision (2) [i.e, $25,000.00] of this section and that afford uninsured motorist coverage as provided by subdivision (3) of this subsection, in an amount equal to the policy limits for automobile bodily injury liability as specified in the owner\u2019s policy.\nThe coverage required under this subdivision shall not be applicable where any insured named in the policy rejects the coverage.\n. . . Rejection of this coverage for policies issued after October 1, 1986, shall be made in writing by the named insured on a form promulgated by the North Carolina Rate Bureau and approved by the Commissioner of Insurance.\n(Emphasis added).\nOur Supreme Court has held that where (as here) liability insurance is in excess of the statutory minimum, \u201cthe UIM coverage must be in an amount equal to the policy limits for bodily injury liability specified in the policy\u201d absent rejection thereof in accordance with the statute. Smith, 328 N.C. at 147, 400 S.E.2d at 50. Thus, although an insured is not legally obligated to contract for UIM coverage in any amount, see, e.g., Sutton, 325 N.C. at 268, 382 S.E.2d at 765, UIM coverage equal to a policy\u2019s liability limits will be assumed unless the insured validly rejects that amount of coverage. See Maryland Casualty Co. v. Smith, 117 N.C. App. 593, 598, 452 S.E.2d 318, 321 (\u201cUnderinsured coverage is mandatory unless rejected by the insured in accordance with the provisions of [G.S.] \u00a7 20-279.21.\u201d), disc. review denied, 340 N.C. 114, 456 S.E.2d 316 (1995). Further, the burden of establishing an insured\u2019s rejection of coverage falls on the insurer. See, e.g., Lichtenberger v. Insurance Co., 7 N.C. App. 269, 273, 172 S.E.2d 284, 287 (1970) (discussing UM coverage).\nAt the time of plaintiff\u2019s accident, rejection of UIM coverage was required to be \u201cin writing ... on a form promulgated by the North Carolina Rate Bureau and approved by the Commissioner of Insurance_\u201d G.S. \u00a7 20-279.21(b)(4).\n. Under the foregoing principles, therefore, unless the evidence reflects an issue of material fact regarding Sovran\u2019s rejection of UIM coverage equal to the liability limits contained within the PMA policy (by use of a form promulgated by the Rate Bureau), we must affirm the court\u2019s determination that, under the applicable version of G.S. \u00a7 20-279.21(b)(4), plaintiff (through its employer Sovran) was afforded UIM coverage in the amount of $1,000,000.00.\nAs of 23 October 1990, a single form had been promulgated by the Rate Bureau and approved by the Commissioner of Insurance to effectuate rejection of UIM coverage in an amount equal to a policy\u2019s bodily injury liability limits:\nSelection/Rejection Form\nUninsured Motorists Coverage\nUninsured/Underinsured Motorists Coverage\nUninsured Motorists Coverage and Uninsured/Underinsured Motorists Coverage have been explained to me. I understand that the option I select will apply to any renewal, reinstatement, substitute, amended, altered, modified, transfer or replacement policies unless I notify you otherwise in writing.\n-I choose to reject Uninsured/Underinsured Motorists Coverage and select Uninsured Motorists Coverage at limits of:\nB.I_; P.D. _\n-I choose to reject both Uninsured and Uninsured/ Underinsured Motorists Coverages.\nPMA\u2019s arguments before this Court rely entirely upon its interpretation of the language and significance of a form executed by Sovran which PMA insists adequately expressed the latter\u2019s intention to reject liability limits UIM coverage. More specifically, Alyce R. Hurley (Hurley, Risk Insurance Manager and Vice President of Sovran) submitted the following document to PMA on Sovran\u2019s behalf on 12 April 1989:\nUninsured Motorists Coverage\nUninsured/Underinsured Motorists Coverage\nUninsured Motorists Coverage and Uninsured/Underinsured Motorists Coverage have been explained to me. I understand that the option I select will apply to any renewal, reinstatement, substitute, amended, altered, modified, transfer or replacement policies with this company unless I notify you otherwise in writing.\nX_ I Choose to reject Uninsured Motorists Coverage Limits equal to my automobile liability limits and select Uninsured Motorists Coverage at Limits of:\nX_ Statutory per each state\u2019s requirement for the following states:\n. . . North Carolina ....\nA subsequent endorsement to the policy (dated 23 January 1990) provided:\nIn consideration of the premium charges in the various states, ... it is agreed that the limit of liability for uninsured motorists will be as indicated in the schedule listed below:\nSTATE LIMIT OF LIABILITY\nNORTH CAROLINA $60,000.00\nPMA maintains the foregoing clearly and unambiguously expressed Sovran\u2019s \u201cintension] to reject underinsured coverage in the amount of the policy limits as offered by PMA.\u201d We disagree.\nFirst, it is readily apparent that the document signed by Hurley on Sovran\u2019s behalf differs from the Rate Bureau directive in several noteworthy respects. For example, although the title and prefatory language of the former refer separately to the terms \u201cuninsured\u201d and \u201cunderinsured,\u201d only \u201cUninsured\u201d coverage is specifically rejected by Sovran. Indeed, the sole option available to an insured by the rejection form utilized in the case sub judice is to \u201creject Uninsured Motorists Coverage Limits equal to my automobile liability limits and select Uninsured Motorists Coverage at Limits of: . . . Statutory per [North Carolina\u2019s] requirement. ...\u201d In contrast, the Rate Bureau formulation enables an insured party to \u201creject both Uninsured and Uninsured/Underinsured Motorists Coverages.\u201d In addition, the rejection form herein limits an insured who rejects liability limits UM coverage to selection of UM coverage only at limits of \u201c[statutory per each state\u2019s requirement . . . .\u201d The Rate Bureau form, on the other hand, provides spaces to indicate selection of specified limits of UM/UIM coverage and to reject both coverages in their entirety.\nMoreover, the language of the rejection form executed by Sovran to the effect the insured was selecting UM limits at \u201cstatutory per [North Carolina\u2019s] requirement\u201d is ambiguous particularly in light of the subsequent endorsement purporting to provide $60,000.00 UM coverage. Further illustrating this ambiguity is Hurley\u2019s understanding reflected in her affidavit that Sovran was \u201cpurchasing] the minimum required amounts of uninsured/underinsured Motorist coverage in the state of North Carolina.\u201d As previously noted, in the absence of effective rejection of liability limits UIM coverage, the minimum required by North Carolina law under the circumstances sub judice would be an amount equal to the $1,000,000.00 liability coverage. In the event of proper rejection of UIM coverage, the minimum amount of UIM coverage under North Carolina law which an insured must procure is none, not $60,000.00. We therefore agree with plaintiff that the rejection form executed by Sovran and accepted by PMA is ambiguous, and thus must be construed against the insurer and in favor of coverage. See, e.g., Hamilton v. Travelers Indemnity Co., 77 N.C. App. 318, 320, 335 S.E.2d 228, 230 (1985), disc. review denied, 315 N.C. 587, 341 S.E.2d 25 (1986).\nWhile acknowledging the rejection form does not explicitly indicate Sovran\u2019s rejection of UIM coverage, PMA responds that the term uninsured as defined in the PMA policy includes any motor vehicle \u201cwhich is an underinsured motor vehicle.\u201d Further, PMA points out that the Act includes the term \u201cunderinsured highway vehicle\u201d in its description of \u201cuninsured motor vehicles.\u201d See N.C. Gen. Stat. \u00a7 20-279.21(b)(4) (1993). Thus, PMA contends \u201cSovran\u2019s rejection of \u2018uninsured motorist coverage limits,\u2019 includes by definition, a rejection of underinsured motorist coverage, and was sufficient to accomplish rejection of both.\u201d In other words, PMA argues rejection of UIM coverage may be read into Sovran\u2019s 12 April 1989 rejection of UM coverage equal to its $1,000,000.00 liability limits.\nHowever, UM and UIM coverages are separately referred to in both the title and introductory statement of the Rate Bureau form, and UM and UIM benefits are thus handled as two distinct types of coverage within that document itself. Construing the rejection form at issue against the insurer and in favor of coverage, therefore, we decline to endorse PMA\u2019s assertion that the concept of \u201cunderin-sured\u201d motorists coverage is incorporated within the word \u201cuninsured\u201d for purposes of rejecting insurance coverage under G.S. \u00a7 20-279.21(b)(4).\nFinally, PMA contends uncontroverted evidence establishes that both Sovran (the insured) and PMA (the insurer) intended that UIM coverage equal to the policy\u2019s liability limits be rejected. Specifically, PMA cites the statement in Hurley\u2019s affidavit to the effect that Sovran \u201cintended to purchase the minimum required amounts of uninsured/underinsured Motorist Coverage in the state of North Carolina and reject uninsured/underinsured motorist coverage in the amount of liability policy limits . . . .\u201d Further, PMA alleges that upon receipt of Sovran\u2019s rejection, PMA charged and accepted premiums reflecting only $60,000.00 UIM coverage. Because a policy of insurance constitutes a contract, PMA suggests that the intent of the parties with respect to the terms of their agreement controls interpretation thereof. See, e.g., White v. Mote, 270 N.C. 544, 555, 155 S.E.2d 75, 82 (1967) (citation omitted).\nWe observe first that the version of G.S. \u00a7 20-279.21(b)(4) in effect in 1990 provided that rejection of UIM coverage \u201cshall\u201d be in writing and on \u201ca form promulgated by the Rate Bureau and approved by the Commissioner of Insurance.\u201d The language \u201cshall\u201d as applied in Chapter 20 of the North Carolina Motor Vehicle Statutes, is \u201cmandatory\u201d and not merely \u201cformal\u201d and \u201cdirectory language.\u201d Pearson v. Nationwide Mutual Ins. Co., 325 N.C. 246, 254-55, 382 S.E.2d 745, 749 (1989) (dealing with liability policy cancellation notice contained in N.C. Gen. Stat. \u00a7 20-310(f)(2) (1983 & Cum. Supp. 1988)); see also Insurance Co. v. Hayes, 276 N.C. 620, 638-39, 174 S.E.2d 511, 522-23 (1970); Thompson Cadillac-Oldsmobile, Inc. v. Silk Hope Automobile, Inc., 87 N.C. App. 467, 472-73, 361 S.E.2d 418, 421-22 (1987) (Chapter 20 requirements governing transfer of legal title and ownership of motor vehicles are mandatory), disc. review denied, 321 N.C. 480, 364 S.E.2d 672 (1988). Again, as of the date of plaintiff\u2019s accident, only a single form complied with the statutory directives.\nIn addition, our Supreme Court has held that although an insured may reject UIM coverage in its entirety, the terms of such coverage are not controlled simply by the parties and their insurance contract. As aforementioned:\n[W]hen a statute [such as G.S. \u00a7 20-279.21(b)(4)] is applicable to the terms of a policy of insurance, the provisions of that statute become part of the terms of the policy to the same extent as if they were written in[to] it, and if the terms of the policy conflict with the statute, the . . . statute will prevail.\nSutton, 325 N.C. at 263, 382 S.E.2d at 762 (citations omitted).\nThus, whatever the expressed intentions of Sovran and PMA, the rejection form executed by Sovran, because it failed to comply with the provisions of G.S. \u00a7 20-279.21(b)(4), did not constitute a proper and effective rejection of UIM coverage equal to the policy\u2019s liability limits.\nPMA\u2019s second primary contention is that failure to utilize a rejection form identical to that promulgated by the Rate Bureau did not operate to invalidate Sovran\u2019s alleged rejection of UIM liability limits coverage. More particularly, PMA claims that the policy at issue did not fall within the jurisdiction of the Rate Bureau, see N.C. Gen. Stat. \u00a7 58-36-1 (1994), and thus use of the precise form promulgated by the Rate Bureau was not required. In the narrow circumstances before us, we disagree.\nWe reiterate our observations above regarding interpretation of the mandatory \u201cshall\u201d in Chapter 20. However, PMA seeks to avoid application of the statute in that the contract of insurance herein was a commercial automobile liability policy providing coverage for more than five vehicles. PMA suggests it is therefore categorized as a \u201cfleet\u201d motor vehicle policy. See N.C. Gen. Stat. \u00a7 58-40-10(2) (1994). Because responsibility of the Rate Bureau in the instant context extends solely to \u201cprivate passenger (nonfleet) motor vehicles,\u201d see G.S. \u00a7 58-36-1(3), PMA insists \u201cthere is no basis upon which to require PMA or Sovran to use the specific rejection form promulgated by the Rate Bureau . . . .\u201d\nNonetheless, it is uncontroverted that at the time of his automobile accident, plaintiff was operating a Sovran vehicle which was principally garaged and registered in North Carolina and which bore a North Carolina license plate. Under N.C. Gen. Stat. \u00a7 20-309 (1993), financial responsibility as provided in Article 9A of Chapter 20 of our General Statutes \u2014 i.e, the Financial Responsibility Act \u2014 must be maintained upon all motor vehicles registered in this State. Again, the version of G.S. \u00a7 20-279.21(b)(4) in effect at the time of plaintiff\u2019s accident clearly and unambiguously mandated that any rejection of UIM coverage \u201cshall\u201d be accomplished by use of a form \u201cpromulgated by the North Carolina Rate Bureau and approved by the Commissioner of Insurance.\u201d\nNotwithstanding, PMA claims that to interpret this portion of G.S. \u00a7 20-279.21(b)(4) as applicable to the fleet policy at issue here would be tantamount to creating a conflict between that statutory section and G.S. \u00a7 58-36-1. See, e.g., Hunt v. Reinsurance Facility, 302 N.C. 274, 288, 275 S.E.2d 399, 405 (1981) (\u201cstatutes should be reconciled with each other when possible . . . .) (citations omitted). We do not believe, however, that giving effect to the plain language of G.S. \u00a7 20-279.21(b)(4) indicates any pronouncement regarding the scope or extent of the Rate Bureau\u2019s jurisdiction. To the contrary, it appears that for purposes of application of the Act in the circumstances of this case, the jurisdiction of the Rate Bureau is largely immaterial.\nBy requiring rejection of UIM coverage to be accomplished by use of a specific Rate Bureau form, G.S. \u00a7 20-279.21(b)(4) was not effectively conferring additional jurisdictional authority to the Rate Bureau. Rather, the statute appears merely to have been concerned with avoiding confusion and ambiguity through the use of a single standard and approved form. Stated otherwise, we disagree with PMA\u2019s conclusion that interpreting the relevant version of G.S. \u00a7 20-279.21(b)(4) as mandating use of a Rate Bureau form for rejection of UIM coverage within a fleet policy necessarily conflicts with G.S. \u00a7 58-36-1.\nPMA in any event suggests we avoid the purported statutory conflict by \u201climit[ing] application of the procedure for using the Rate Bureau form to companies that are otherwise subject to the Rate Bureau\u2019s jurisdiction.\u201d PMA perceives support in a more recently enacted version of G.S. \u00a7 20-279.21(b)(4). See N.C. Gen. Stat. \u00a7 20-279.21(b)(4) (Cum. Supp. 1992 & 1993) (rejection of UIM coverage \u201cfor policies under the jurisdiction of the North Carolina Rate Bureau\u201d are to be in writing on an approved Rate Bureau form). PMA claims \u201cthe Legislature\u2019s amendment expresses its intent that G.S. \u00a7 20-279.21(b)(4) does not, in either its current or pre-amended form, grant jurisdiction to the Rate Bureau beyond that found in G.S. \u00a7 58-36-1.\u201d\nWe note that absent express mandate by the General Assembly, \u201camendments to statutes are not necessarily clarifications of legislative intent.\u201d Proctor, 324 N.C. at 225, 376 S.E.2d at 764. Moreover, the General Assembly explicitly provided that the 1991 amendments to G.S. \u00a7 20-279.21(b)(4) do not affect \u201cclaims arising prior to\u201d or \u201clitigation pending on the effective date of\u2019 the amendments, see 1991 N.C. Sess. Laws ch. 646, \u00a7 4, and further that they \u201cshall only apply to new and renewal policies written on and after the effective date\u201d of the relevant sections \u2014 5 November 1991. Id. As previously indicated, Sovran\u2019s PMA policy was issued in January 1990 and the accident in which plaintiff was injured occurred 23 October 1990. As plaintiff\u2019s claim thus arose prior to the applicability of the 1991 amendments, we decline to look beyond the earlier version of G.S. \u00a7 20-279.21(b)(4).\nShould we determine (as we have) that the statute indeed required use of the Rate Bureau form, PMA also presents an alternative argument that the 12 April 1989 document executed by Sovran \u201csubstantially complied\u201d with the statutory mandate and fully satisfied its underlying objectives.\nMore specifically, PMA alleges one of the primary purposes of the Act is to allow an insured knowingly and intentionally to reject UIM coverage. Because Hurley\u2019s affidavit establishes that UM/UIM coverage had been fully explained to her and that she had intentionally rejected PMA\u2019s offer of UM/UIM coverage equal to the policy\u2019s bodily injury liability limits, PMA contends the goal of the Act had been achieved. PMA suggests we not \u201celevate form over substance . . . [by] allowing] the procedural mechanism defined in the statute to supersede the purpose underlying that statute.\u201d\nWe reiterate, however, that the primary purpose of the Act is rather to assure compensation for the innocent victims of uninsured or underinsured drivers, such as plaintiff herein. See, e.g., Proctor, 324 N.C. at 224, 225, 376 S.E.2d at 763, 764 (citation omitted). PMA\u2019s proffered resolution (in effect denying plaintiff recovery in excess of $60,000.00) does not serve to further the \u201cbeneficial purpose\u201d for which G.S. \u00a7 20-279.21 (1990) was enacted. See Sutton, 325 N.C. at 265, 382 S.E.2d at 763 (citation omitted).\nAs additional support for its position that \u201csubstantial compliance\u201d with G.S. \u00a7 20-279.21(b)(4) was sufficient, PMA observes that a circular letter sent by the Rate Bureau to its member companies included the following prohibition: \u201cthe language [of the proposed form] may not be changed or substantively amended, without prior approval....\u201d PMA contends that to the extent the rejection form utilized herein modified that of the Rate Bureau, any such amendment was \u201cnonsubstantive\u201d and expressly permitted under the foregoing instructions.\nAs discussed supra, however, the PMA text differs from (\u201cchanges\u201d) that issued by the Rate Bureau in numerous respects. These alterations constitute substantive amendments of the sort prohibited by the Rate Bureau\u2019s instructional letter. Significantly, moreover, it is undisputed that prior approval of the changes was never sought either by PMA or by Sovran.\nFor the reasons discussed hereinabove, we hold the policy affords $1,000,000.00 UIM coverage to plaintiff and that summary judgment was properly granted in his favor.\nAffirmed.\nJudges JOHNSON and GREENE concur.",
        "type": "majority",
        "author": "JOHN, Judge."
      }
    ],
    "attorneys": [
      "Edwards & Kirby, by David F. Kirby and Tiana H. Irvin, for plaintiff-appellee.",
      "Young, Moore, Henderson & Alvis, P.A., by Ralph W. Meekins and Glenn C. Raynor, for defendant-appellant Pennsylvania Manufacturers Association Insurance Company.",
      "Cranfill, Sumner & Hartzog, by Theodore B. Smyth and Kari L. Russwurm, for defendant-appellee North Carolina Farm Bureau Mutual Insurance Company."
    ],
    "corrections": "",
    "head_matter": "DAVID L. HENDRICKSON, Plaintiff v. JAMES L. LEE, NATIONWIDE MUTUAL INSURANCE COMPANY, C/S SOVRAN CREDIT CORPORATION, PENNSYLVANIA MANUFACTURERS ASSOCIATION INSURANCE COMPANY and NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, Defendants\nNo. 9310SC651\n(Filed 18 July 1995)\n1. Insurance \u00a7 530 (NCI4th)\u2014 underinsured coverage\u2014 waiver of policy limit coverage \u2014 use of unapproved form\nSummary judgment was properly granted for plaintiff in a declaratory judgment action arising from an automobile accident to determine whether a policy issued by Pennsylvania Manufacturers Association Insurance Company (PMA) provided underinsured motorist coverage where the insurance company argued that the court erred in not finding that its insured had previously rejected UIM coverage equal to the liability limits ($1,000,000) and instead selected UIM coverage in the amount of $60,000. Where liability insurance is in excess of the statutory minimum (as here), UIM coverage must be in an amount equal to the policy limits for bodily injury liability specified in the policy absent rejection thereof in accordance with the N.C.G.S. \u00a7 20-279.21(b)(4). At the time of plaintiffs accident, rejection of UIM coverage was required to be in writing on a form promulgated by the North Carolina Rate Bureau and approved by the Commissioner of Insurance. Although PMA contends that the form executed by the insured adequately expressed the intention to reject liability limits UIM coverage, that document differs from the Rate Bureau directive in several respects. Moreover, the language of the executed form is ambiguous and thus must be construed against the insurer and in favor of coverage. Finally, PMA contends that uncontroverted evidence, including an affidavit and the premiums accepted, establish that UIM coverage equal to the policy limits be rejected; however, the language of the statute is mandatory and, as of the date of the accident, only a single form complied with statutory directives.\nAm Jur 2d, Automobile Insurance \u00a7 322.\n2. Insurance \u00a7 527 (NCI4th)\u2014 underinsured coverage\u2014 wavier of policy limit coverage \u2014 approval of form by Rate Bureau\nThe trial court did not err in a declaratory judgment action arising from an automobile accident by granting summary judgment for plaintiff where defendant insurance company contended that the insured had rejected policy limit UIM coverage on a form other than the form promulgated by the Rate Bureau. Although defendant contended that the failure to utilize a rejection form identical to that promulgated by the Rate Bureau did not invalidate the rejection because the policy did not fall within the jurisdiction of the Rate Bureau in that this was a fleet vehicle policy and the responsibility of the Rate Bureau extends solely to private passenger motor vehicles, the version of N.C.G.S. \u00a7 20-279.21(b)(4) in effect at the time of the accident clearly and unambiguously mandated that any rejection of UIM coverage shall be accomplished by use of a form promulgated by the Rate Bureau and approved by the Commissioner of Insurance. That statute appears merely to have been concerned with avoiding confusion and ambiguity and did not effectively confer additional jurisdictional authority on the Rate Bureau. Although defendant contends that a recent amendment expresses the Legislature\u2019s intent that N.C.G.S. \u00a7 20-279.21(b)(4) does not grant jurisdiction to the Rate Bureau beyond that found in N.C.G.S. \u00a7 58-36-1, amendments to statutes are not necessarily clarifications of legislative intent absent express mandate, and the General Assembly here explicitly provided that the 1991 amendments do not affect claims arising prior to or litigation pending on the effective date of the amendments. Plaintiffs claims arose prior to the effective date.\nAm Jur 2d, Automobile Insurance \u00a7 322.\n3. Insurance \u00a7 530 (NCT4th)\u2014 underinsured coverage\u2014 waiver of policy limit coverage \u2014 use of unapproved form\u2014 not substantial compliance\nThe trial court did not err in a declaratory judgment action arising from an automobile accident by granting summary judgment for plaintiff where defendant insurance company contended that a document executed by the insured waiving policy limit UIM coverage substantially complied with the mandate of N.C.G.S. \u00a7 20-279.21(b)(4) and fully satisfied its underlying objectives. However, the primary purpose of the Financial Responsibility Act is to assure compensation for the innocent victims of uninsured or underinsured drivers, such as plaintiff here, and PMA\u2019s proffered resolution does not serve to further the purpose of the statute. Although defendant observes that a letter sent by the Rate Bureau to its member companies said that the form may not be changed or substantively amended without prior approval, and contends that the changes here were nonsubstantive, the alterations in the insurance company document from that issued by the Rate Bureau constitute substantive amendments of the sort prohibited by the Rate Bureau\u2019s letter and it is undisputed that prior approval of the changes was never sought.\nAm Jur 2d, Automobile Insurance \u00a7 322.\nAppeal by defendant Pennsylvania Manufacturers Association Insurance Company from summary judgment entered 20 August 1992 by Judge Gregory A. Weeks in Wake County Superior Court. Heard in the Court of Appeals 23 March 1994.\nEdwards & Kirby, by David F. Kirby and Tiana H. Irvin, for plaintiff-appellee.\nYoung, Moore, Henderson & Alvis, P.A., by Ralph W. Meekins and Glenn C. Raynor, for defendant-appellant Pennsylvania Manufacturers Association Insurance Company.\nCranfill, Sumner & Hartzog, by Theodore B. Smyth and Kari L. Russwurm, for defendant-appellee North Carolina Farm Bureau Mutual Insurance Company."
  },
  "file_name": "0444-01",
  "first_page_order": 478,
  "last_page_order": 492
}
