{
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  "name": "METROPOLITAN PROPERTY AND CASUALTY INSURANCE CO., Plaintiff-Appellant v. JANNIS C. CAVINESS, Defendant-Appellee",
  "name_abbreviation": "Metropolitan Property & Casualty Insurance v. Caviness",
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    "judges": [
      "Judges LEWIS and WALKER concur."
    ],
    "parties": [
      "METROPOLITAN PROPERTY AND CASUALTY INSURANCE CO., Plaintiff-Appellant v. JANNIS C. CAVINESS, Defendant-Appellee"
    ],
    "opinions": [
      {
        "text": "MARTIN, Mark D., Judge.\nPlaintiff Metropolitan Property and Casualty Insurance (Metropolitan) appeals from order of the trial court granting judgment on the pleadings to defendant Jannis Caviness (Caviness).\nIt is undisputed that on 29 February 1992 Caviness was involved in an automobile accident with Linda Lee Nifong (Nifong) in High Point, North Carolina. At the time of the accident, Caviness was covered by an insurance policy issued to her by Metropolitan (Metropolitan policy). Nifong\u2019s insurance company, Unison Insurance Company, exhausted the limits of its liability coverage, $50,000, in payments to Caviness and the passengers in her car. Specifically, Caviness received $21,643.49.\nCaviness then notified Metropolitan she- was asserting a claim against the underinsured motorist (UIM) coverage in her policy. At no time prior to the accident did Caviness execute a selection/rejection form thereby establishing the limit of her UIM coverage. On 16 March 1992, however, Caviness executed the requisite form and selected coverage of $100,000 per person and $300,000 per accident.\nOn 30 November 1994 Metropolitan instituted the present declaratory judgment action seeking a determination of the amount of UIM coverage the Metropolitan policy accords Caviness. On 16 October 1995 Caviness, pursuant to N.C.R. Civ. P. 12(c), made a motion for judgment on the pleadings which the trial court granted on the same day. In its order, the trial court, relying on N.C. Gen. Stat. \u00a7 20-279.21(b)(4) (1991), concluded the Metropolitan policy provided one million dollars in UIM coverage from 25 January 1992 to 16 March 1992, at which time Caviness selected UIM coverage in the amounts detailed above.\nOn appeal Metropolitan contends the trial court erred by granting Caviness\u2019 motion for judgment on the pleadings because: (1) Caviness selected UIM coverage in the amount of $100,000; (2) section 279.21(b)(4) mandates, absent selection or rejection, that UIM coverage should be equal to the amount of liability coverage; (3) the pleadings disclose issues of fact; and (4) the trial court lacked subject matter jurisdiction.\nI.\nWe first consider Metropolitan\u2019s allegation the trial court lacked subject matter jurisdiction to enter the present declaratory judgment because there was no actual controversy between the parties.\nIf an actual controversy exists between parties, it is well settled that a declaratory judgment action is an appropriate mechanism for resolving the extent of coverage provided by an insurance contract. Ramsey v. Interstate Insurors, Inc., 89 N.C. App. 98, 100-101, 365 S.E.2d 172, 174, disc. review denied, 322 N.C. 607, 370 S.E.2d 248 (1988). The \u201cactual controversy\u201d requirement is satisfied if \u201clitigation appear[s] unavoidable.\u201d Gaston Bd. of Realtors v. Harrison, 311 N.C. 230, 234, 316 S.E.2d 59, 61 (1984) (citations omitted). \u201cMere apprehension or the mere threat of an action or a suit is not enough.\u201d Id. at 234, 316 S.E.2d at 62.\nIn the present case, a personal injury action was pending against Nifong when the trial court granted judgment on the pleadings to Caviness. Although no final judgment had been entered in the underlying personal injury action, Metropolitan is liable, to the limit of its UIM coverage, for the difference between the total damages awarded and the amount of Nifong\u2019s settlement. N.C. Gen. Stat. \u00a7 20-279.21(b)(4) (1991). Therefore, an actual controversy exists between Caviness and Metropolitan. See Smith v. Nationwide Mutual Ins. Co., 97 N.C. App. 363, 366-367, 388 S.E.2d 624, 626-627 (1990), rev\u2019d on other grounds, 328 N.C. 139, 400 S.E.2d 44, reh\u2019g denied, 328 N.C. 577, 403 S.E.2d 514 (1991).\nTo hold otherwise, as urged by Metropolitan, would deprive Caviness of information necessary for an informed decision on whether to accept a settlement offer or to pursue the underlying personal injury action. Smith, 97 N.C. App. at 367, 388 S.E.2d at 627. Such a holding would also ignore the reality that the majority of insurance claims are settled out-of-court. Id. Accordingly, as \u201cdeclaratory [] relief was intended to avoid precisely the \u2018accrual of avoidable damages to one not certain of [her] rights,\u2019 \u201d id., we conclude the trial court had subject matter jurisdiction to enter its declaratory judgment.\nII.\nBecause the trial court had the requisite subject matter jurisdiction, we now turn to the dispositive issue \u2014 whether, absent selection or rejection of UIM coverage by the insured, N.C. Gen. Stat. \u00a7 20-279.21(b)(4) mandates UIM coverage in an amount equal to the limit of liability coverage, or, alternatively, in the amount of one million dollars.\nThe 1991 version of section 20-279.21(b)(4) (1991 statute) governs the present action. The 1991 statute provides, in pertinent part:\n(b) Such owner\u2019s policy of liability insurance:\n(4) Shall. . . provide underinsured motorist coverage . . . m an amount not to be less than the financial responsibility amounts for bodily iniurv liability as set forth in G.S. 20-279.5 nor greater than one million dollars [] as selected bv the policy owner.\nN.C. Gen. Stat. \u00a7 20-279.21(b)(4) (Cum. Supp. 1991) (emphasis added). As codified, however, the 1991 statute is inherently ambiguous regarding the amount of UIM coverage to accord an insured absent a selection or rejection of such coverage. Put simply, when, as here, an insured fails to select or reject UIM coverage, the 1991 statute provides no more than a range of possible coverage limits\u2014 not less than liability coverage but not more than one million dollars.\nAny ambiguity in the Financial Responsibility Act (Act), which includes section 20-279.21(b)(4), must be liberally construed to effectuate the Act\u2019s remedial purpose \u2014 protecting innocent victims of automobile accidents from financially irresponsible motorists. Insurance Co. v. Insurance Co., 269 N.C. 341, 352, 152 S.E.2d 436, 444 (1967). See also Hendrickson v. Lee, 119 N.C. App. 444, 449, 459 S.E.2d 275, 278 (1995) (remedial legislation, like the Act, is to be liberally construed to effectuate its beneficial purpose). Toward that end, we note the underlying purpose of the Act, which remains unchanged even today, \u201cis best served when [every provision of the Act] is interpreted to provide the innocent victim with the fullest possible protection.\u201d Proctor v. N.C. Farm, Bureau Mutual Ins. Co., 324 N.C. 221, 225, 376 S.E.2d 761, 764 (1989) (emphasis added).\nIn Proctor, our Supreme Court was confronted with a similar interpretative conundrum \u2014 the applicable version of section 20-279.21(b)(4) did not specify the amount of UIM coverage a policy must provide, but rather only indicated UIM coverage was \u201c \u2018not to exceed\u2019 the policy limits for automobile bodily injury liability as specified in the owner\u2019s policy.\u201d Id. at 223, 376 S.E.2d at 763 (emphasis added). The Proctor Court, in an attempt to accord the plaintiff with the greatest possible recovery, found the policy in question provided UIM coverage up to the limit of the liability coverage. Id. at 225-226, 376 S.E.2d at 764.\nAdmittedly, the Proctor Court cited a subsequent clarifying amendment as further support for their interpretation of the applicable version of section 20-279.21(b)(4). Metropolitan relies heavily on the Proctor Court\u2019s use of this \u201cadditional evidence\u201d in arguing this Court should likewise consider the 1992 amendments to section 20-279.21(b)(4) in construing the 1991 statute. Although we recognize that, under certain circumstances, clarifying amendments are useful interpretive aids, see, e.g., Al Smith Buick Co. v. Mazda Motor of America, 122 N.C. App. 429, 435, 470 S.E.2d 552, 555, disc. review denied, 343 N.C. 749, 473 S.E.2d 609 (1996), it is readily apparent that Metropolitan\u2019s proposed interpretation would accord the innocent victim of an underinsured tortfeasor the minimum level of protection under the 1991 statute. Such a holding clearly contravenes the policy of the Act which, as acknowledged by our Supreme Court, \u201cis best served when the statute is interpreted to provide the innocent victim with the fullest possible protection.\u201d Proctor, 324 N.C. at 225, 376 S.E.2d at 764 (emphasis added).\nTherefore, under Proctor, Insurance Co., and Hendrickson, we conclude that absent completion of an approved selection or rejection form the insured is, as a matter of law, entitled to one million dollars in UIM coverage. Accordingly, we affirm the trial court\u2019s grant of judgment on the pleadings to Caviness.\nFinally, we note, after careful review of the present record, that Metropolitan\u2019s remaining assignments of error are wholly without merit.\nAffirmed.\nJudges LEWIS and WALKER concur.\nThe 1992 amendment to section 20-279.21(b)(4) provides, in pertinent part, that, \u201cIf the named insured does not reject underinsured motorist coverage and does not select different coverage limits, the amount of underinsured motorist coverage shall be equal to the highest limit of bodily injury liability coverage for any one vehicle in the policy.\u201d 1991 N.C. Sess. Laws (1992 Reg. Sess.) ch. 837, \u00a7 9.",
        "type": "majority",
        "author": "MARTIN, Mark D., Judge."
      }
    ],
    "attorneys": [
      "Morris, York, Williams, Surles & Brearley, by R. Gregory Lewis, for plaintiff-appellant.",
      "Law Offices of Stephen A. Lamb, by Stephen A. Lamb and Christine M. Lamb, and Law Offices of Todd E. McCurry, by Todd E. McCurry, for defendant-appellee."
    ],
    "corrections": "",
    "head_matter": "METROPOLITAN PROPERTY AND CASUALTY INSURANCE CO., Plaintiff-Appellant v. JANNIS C. CAVINESS, Defendant-Appellee\nNo. COA96-163\n(Filed 17 December 1996)\n1. Declaratory Judgment Actions \u00a7 12 (NCI4th)\u2014 subject matter jurisdiction \u2014 pending personal injury action \u2014 UIM coverage \u2014 potential liability\nThe trial court had subject matter jurisdiction to enter its declaratory judgment on the amount of UIM coverage where there was no underlying judgment from the defendant\u2019s pending personal injury action. Plaintiff insurer instituted a declaratory judgment action seeking a determination of the amount of UIM coverage plaintiff\u2019s policy accorded the defendant where plaintiff had a pending personal injury against another party and that party\u2019s insurance policy limit had been exhausted. Although no final judgment had been entered in the underlying personal injury action, plaintiff was liable, to the limit of its UIM coverage, for the difference between the total damages awarded and the amount of the settlement in the underlying claim. The potential of defendant\u2019s liability constituted an actual controversy between the plaintiff and defendant; therefore, declaratory relief was appropriate. NC.G.S. \u00a7 20-279.21(b)(4)\nAm Jur 2d, Declaratory Judgments \u00a7\u00a7 121-137.\n2. Insurance \u00a7 528 (NCI4th)\u2014 UIM coverage \u2014 failure to make selection \u2014 amount of coverage\nAbsent completion of an approved selection or rejection form, an insured is, as a matter of law, entitled to one million dollars in UIM coverage pursuant to N.C.G.S. \u00a7 20-279.21(b)(4) (1991).\nAm Jur 2d, Automobile Insurance \u00a7 322.\nAppeal by plaintiff from order entered 16 November 1995 by Judge James C. Davis in Guilford County Superior Court. Heard in the Court of Appeals 22 October 1996.\nMorris, York, Williams, Surles & Brearley, by R. Gregory Lewis, for plaintiff-appellant.\nLaw Offices of Stephen A. Lamb, by Stephen A. Lamb and Christine M. Lamb, and Law Offices of Todd E. McCurry, by Todd E. McCurry, for defendant-appellee."
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