{ "id": 11437133, "name": "EATMAN LEASING, INC and RUSSELL O. LEITCH, SR. Plaintiffs-Appellees v. EMPIRE FIRE & MARINE INSURANCE COMPANY, Defendant-Appellant, and DOUGLAS W. SHIPLEY, Defendant-Appellee", "name_abbreviation": "Eatman Leasing, Inc. v. Empire Fire & Marine Insurance", "decision_date": "2001-08-07", "docket_number": "No. COA00-571", "first_page": "278", "last_page": "290", "citations": [ { "type": "official", "cite": "145 N.C. App. 278" } ], "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": "329 S.E.2d 648", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1985, "pin_cites": [ { "page": "651" }, { "page": "651" } ], "opinion_index": 0 }, { "cite": "313 N.C. 460", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4718547 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/313/0460-01" ] }, { "cite": "467 S.E.2d 34", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1996, "pin_cites": [ { "page": "39" }, { "page": "40" }, { "page": "39" } ], "opinion_index": 0 }, { "cite": "342 N.C. 482", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 795937 ], "weight": 2, "year": 1996, "pin_cites": [ { "page": "490" } ], "opinion_index": 0, "case_paths": [ "/nc/342/0482-01" ] }, { "cite": "407 S.E.2d 497", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1991, "pin_cites": [ { "page": "503" }, { "page": "503" }, { "page": "611" }, { "page": "502" } ], "opinion_index": 0 }, { "cite": "329 N.C. 603", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2555126 ], "weight": 3, "year": 1991, "pin_cites": [ { "page": "613" }, { "page": "611-12" } ], "opinion_index": 0, "case_paths": [ "/nc/329/0603-01" ] }, { "cite": "430 S.E.2d 895", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 7, "year": 1993, "pin_cites": [ { "page": "898", "parenthetical": "citation omitted" }, { "page": "898" }, { "page": "899" }, { "page": "901" }, { "page": "901", "parenthetical": "citation omitted" }, { "page": "901" } ], "opinion_index": 0 }, { "cite": "334 N.C. 1", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2531661 ], "weight": 3, "year": 1993, "pin_cites": [ { "page": "6", "parenthetical": "citation omitted" }, { "page": "6" } ], "opinion_index": 0, "case_paths": [ "/nc/334/0001-01" ] }, { "cite": "487 S.E.2d 148", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1997, "pin_cites": [ { "page": "150", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "126 N.C. App. 811", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11713573 ], "year": 1997, "pin_cites": [ { "page": "815", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/126/0811-01" ] }, { "cite": "172 S.E.2d 518", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1970, "pin_cites": [ { "page": "522", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "276 N.C. 348", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561396 ], "year": 1970, "pin_cites": [ { "page": "355", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/276/0348-01" ] }, { "cite": "337 S.E.2d 167", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "169" } ], "opinion_index": 0 }, { "cite": "78 N.C. App. 418", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8521642 ], "year": 1985, "pin_cites": [ { "page": "420" } ], "opinion_index": 0, "case_paths": [ "/nc-app/78/0418-01" ] }, { "cite": "152 S.E.2d 102", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1967, "pin_cites": [ { "page": "107" } ], "opinion_index": 0 }, { "cite": "269 N.C. 235", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562714 ], "year": 1967, "pin_cites": [ { "page": "240" } ], "opinion_index": 0, "case_paths": [ "/nc/269/0235-01" ] }, { "cite": "542 S.E.2d 205", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "pin_cites": [ { "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "351 N.C. 350", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1155840, 1155802, 1155946, 1155926 ], "year": 2000, "pin_cites": [ { "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/351/0350-04", "/nc/351/0350-01", "/nc/351/0350-03", "/nc/351/0350-02" ] }, { "cite": "518 S.E.2d 814", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "816" } ], "opinion_index": 0 }, { "cite": "135 N.C. App. 92", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11239160 ], "year": 1999, "pin_cites": [ { "page": "94" } ], "opinion_index": 0, "case_paths": [ "/nc-app/135/0092-01" ] }, { "cite": "348 S.E.2d 794", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "796", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "318 N.C. 378", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4736888 ], "year": 1986, "pin_cites": [ { "page": "380", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/318/0378-01" ] }, { "cite": "403 S.E.2d 571", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "572" } ], "opinion_index": 0 }, { "cite": "102 N.C. App. 788", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525787 ], "year": 1991, "pin_cites": [ { "page": "789" } ], "opinion_index": 0, "case_paths": [ "/nc-app/102/0788-01" ] }, { "cite": "246 S.E.2d 773", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1978, "pin_cites": [ { "page": "777" }, { "page": "777" } ], "opinion_index": 0 }, { "cite": "295 N.C. 500", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8564714 ], "year": 1978, "pin_cites": [ { "page": "505" } ], "opinion_index": 0, "case_paths": [ "/nc/295/0500-01" ] }, { "cite": "499 S.E.2d 772", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1998, "pin_cites": [ { "page": "775" } ], "opinion_index": 0 }, { "cite": "129 N.C. App. 389", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11650568 ], "year": 1998, "pin_cites": [ { "page": "393-94" } ], "opinion_index": 0, "case_paths": [ "/nc-app/129/0389-01" ] }, { "cite": "547 S.E.2d 810", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2001, "opinion_index": 0 }, { "cite": "353 N.C. 371", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 135616, 135649, 135948, 135763, 135735 ], "year": 2001, "opinion_index": 0, "case_paths": [ "/nc/353/0371-05", "/nc/353/0371-03", "/nc/353/0371-01", "/nc/353/0371-02", "/nc/353/0371-04" ] }, { "cite": "520 S.E.2d 603", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "607" } ], "opinion_index": 0 }, { "cite": "135 N.C. App. 442", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11241293 ], "year": 1999, "pin_cites": [ { "page": "447" } ], "opinion_index": 0, "case_paths": [ "/nc-app/135/0442-01" ] } ], "analysis": { "cardinality": 866, "char_count": 25093, "ocr_confidence": 0.77, "pagerank": { "raw": 3.926690881122322e-07, "percentile": 0.9028576569522007 }, "sha256": "32432da0134b6f1b2c1853e4dd8bb73563b142f9e176e727f8da29f86a1ed7ea", "simhash": "1:1157c842c07608d7", "word_count": 4034 }, "last_updated": "2023-07-14T19:02:14.256422+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Chief Judge EAGLES and Judge McCULLOUGH concur." ], "parties": [ "EATMAN LEASING, INC and RUSSELL O. LEITCH, SR. Plaintiffs-Appellees v. EMPIRE FIRE & MARINE INSURANCE COMPANY, Defendant-Appellant, and DOUGLAS W. SHIPLEY, Defendant-Appellee" ], "opinions": [ { "text": "BRYANT, Judge.\nEmpire Fire & Marine Insurance Company (Empire) issued four business auto policies (two primary and two excess) to Eatman Leasing which were in effect on 11 January 1997. On that date, Plaintiff Russell O. Leitch, Sr. and Defendant Douglas W. Shipley, were involved in an automobile accident. The vehicle driven by Leitch was owned by Eatman Leasing. Eatman Leasing was in the business of leasing, renting and selling automobiles. Leitch was traveling to Wilmington in order to transport the vehicle to Eatman Leasing\u2019s Wilmington operation.\nPlaintiffs Eatman Leasing and Leitch filed a complaint for a declaratory judgment against Defendants Empire and Shipley on 23 April 1999. Plaintiffs sought a declaration that Empire had a duty to fully indemnify them under the four insurance policies. Both defendants filed motions for summary judgment. The trial court granted defendant Shipley\u2019s motion for summary judgment on 17 February 2000. Empire filed a notice of appeal on 10 March 2000.\nThere are two basic issues on appeal: whether the trial court erred in granting summary judgment in favor of Shipley in I) finding that the four insurance policies afforded coverage to Eatman and Leitch and II) finding the policies provided for prejudgment interest over the policy limits. For the reasons which follow, we find no error in the trial court\u2019s rulings.\nI.\nThe trial court held that: 1) all four policies were in effect on the date of the accident; 2) the vehicle driven by Leitch and owned by Eatman is a covered auto under policy numbers SG231000 and SL231000; 3) Eatman is an insured under the policies because it is the named insured; 4) Leitch is an insured because he operated the vehicle with the permission of Eatman as set forth in the \u201cWho is an Insured\u201d section of the primary policies; 5) the vehicle driven by Leitch and owned by Eatman was a covered auto under Policy Number SF231000, pursuant to the amendatory language of Endorsement EM0808GR; 6) both Eatman and Leitch are insureds under Policy Number SX231000 because that policy incorporates by reference the \u201cinsureds\u201d and \u201ccovered autos\u201d definitions in the primary policy, SF231000.\nEmpire first argues that the trial court erred in granting Shipley\u2019s summary judgment motion and finding that all four insurance policies afforded coverage to Eatman Leasing and Leitch. Empire argues that the trial court\u2019s decision was in direct contravention of the express language of the policies. We disagree.\nSummary judgment is proper \u201cif the pleadings, 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 N.C.G.S. \u00a7 1A-1, Rule 56(c) (2000). Once the moving party makes the required showing, the burden shifts to the non-moving party to produce a forecast of evidence demonstrating specific facts showing that he can at least establish a prima facie case at trial. Gaunt v. Pittaway, 135 N.C. App. 442, 447, 520 S.E.2d 603, 607 (1999), cert. denied, 353 N.C. 371, 547 S.E.2d 810 (2001) citing Moore v. Coachmen Industries, Inc., 129 N.C. App. 389, 393-94, 499 S.E.2d 772, 775 (1998).\nAn insurance policy is a contract and like all other contracts, \u201cthe goal of construction is to arrive at the intent of the parties when the policy was issued.\u201d Woods v. Nationwide Mutual Ins. Co., 295 N.C. 500, 505, 246 S.E.2d 773, 777 (1978). The intent of the parties may be derived from the language in the policy. Kruger v. State Farm Mut. Auto. Ins. Co., 102 N.C. App. 788, 789, 403 S.E.2d 571, 572 (1991). When the policy language is unambiguous, our courts have a \u201cduty to construe and enforce insurance policies as written, without rewriting the contract or disregarding the express language used.\u201d Fidelity Bankers Life Ins. Co. v. Dortch, 318 N.C. 378, 380, 348 S.E.2d 794, 796 (1986) (citation omitted). \u201c[W]here the language used in the policy is ambiguous and reasonably susceptible to more than one interpretation,\u201d judicial construction is necessary. Allstate Ins. Co. v. Runyon Chatterton, 135 N.C. App. 92, 94, 518 S.E.2d 814, 816 (1999), disc. review denied, 351 N.C. 350, 542 S.E.2d 205 (2000) (citation omitted). If there is uncertainty or ambiguity in the language of an insurance policy regarding whether certain provisions impose liability, the language should be resolved in the insured\u2019s favor. Williams v. Nationwide Mut. Ins. Co., 269 N.C. 235, 240, 152 S.E.2d 102, 107 (1967). Moreover, exclusions from liability are not favored, and are to be strictly construed against the insurer. Southeast Airmotive Corp. v. U.S. Fire Insur. Co., 78 N.C. App. 418, 420, 337 S.E.2d 167, 169 (1985).\nWhen an insurance policy provides a definition of a term, that definition should be used. However, when no definition is provided in the policy, the nontechnical words have the same meaning as they would in ordinary speech. Woods at 506, 246 S.E.2d at 777. In determining the meaning of a term, the court may consider other portions of the policy and all clauses of it are to be construed, if possible, so as to bring them into harmony. \u201cEach word is deemed to have been put into the policy for a purpose and will be given effect, if that can be done by any reasonable construction . . . .\u201d Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., 276 N.C. 348, 355, 172 S.E.2d 518, 522 (1970) (citation omitted).\nIn this case, the four policies issued were: SG231000, entitled \u201cGarage Auto Policy Form\u201d [Primary Garage Policy] with endorsements; SL231000, entitled \u201cAutomobile Liability Excess Indemnity Policy Form\u201d [Excess Garage Policy] with endorsements; SF231000 entitled, \u201cRental Auto Policy Form\u201d [Primary Rental Policy] with endorsements; and SX231000, entitled \u201cExcess Rental Policy\u201d [Excess Rental Policy] with endorsements. Empire does not dispute that Eatman Leasing and Leitch are covered under the Primary Garage Policy, SG231000. However, Empire does challenge the coverage of Eatman and Leitch under the: A) Excess Garage Policy, SL231000; B) Primary Rental Policy, SF231000; and C) Excess Rental Policy, SX231000.\nA. Excess Garage Policy [SL231000]\nEmpire contends that the Excess Garage Policy did not afford coverage for the January 1997 accident because the express provisions of the policy do not cover Leitch. To determine what coverage Leitch is afforded under the Excess Garage Policy, we need to examine this excess policy and the Primary Garage Policy, SG231000, which is specifically referenced in the declarations of the Excess Garage Policy as the \u201cunderlying insurance\u201d. The relevant portions of the Excess Garage Policy, SL231000 provide:\nINSURING AGREEMENT\nExcess Indemnity Over Automobile Liability Insurance\n\u201cWe\u201d will indemnify \u201cyou\u201d for \u201closs\u201d which occurs during the \u201cpolicy period\u201d in excess (emphasis added) of the \u201cprimary insurance.\u201d\nCONDITIONS\nApplication of Primary Insurance\nUnless a provision to the contrary appears in \u201cour\u201d policy, all the conditions, definitions, agreements, exclusions and limitations of the \u201cprimary insurance\u201d, including changes by endorsement will apply to \u201cour\u201d policy.\nThe following \u201cWho is an Insured\u201d provision from the Primary Garage Policy, SG231000 also applies to the excess policy:\n1. WHO IS AN INSURED\na. The following are \u201cinsureds\u201d for covered \u201cautos\u201d:\n(1) You for any covered \u201cauto\u201d.\n(2) Anyone else while using with your permission (emphasis added) a covered \u201cauto\u201d you own, hire or borrow except:\n(c) Someone using a covered \u201cauto\u201d while he or she is working in a business of selling, servicing, repairing, parking or storing \u201cautos\u201d unless that business is your \u201cgarage operations\u2019\u2019, (emphasis added).\nThe excess policy defines \u201cyou\u201d and \u201cyour\u201d to mean or refer to the Insured named in the \u201cdeclarations\u201d. However, EM0951, the Specific Named Insured Endorsement amends the definition of \u201cyou\u201d and \u201cyour\u201d by providing in part:\nDefinition 1. under DEFINITIONS is deleted in its entirety and replaced with the following:\n1. . . . The words \u201cyou\u201d or \u201cyour\u201d mean or refer to: a. the Insured named in the \u201cdeclarations\u201d\ne. only such other individuals who are specifically listed on this endorsement (emphasis added)\nEmpire contends that the endorsement modifies the definition of \u201cinsured\u201d in both the primary and excess policies to include only those non-employees who are named in the declarations. Empire takes the position that the only way Leitch would be covered under the Excess Garage Policy is if Leitch was an employee of Eatman Leasing (as Eatman Leasing is the named insured) if Leitch, as an independent contractor or non-employee of Eatman Leasing, is named on the endorsement.\nWe disagree and find that the \u201cWho is an Insured\u201d language in the primary insurance policy was not altered by the endorsement. This is because the endorsement modified the definition of \u201cyou\u201d and \u201cyour\u201d but it did not change the definition of \u201cinsureds.\u201d Thus the \u201cWho is an Insured\u201d language remains applicable to the excess policy. Eatman is the named insured. Leitch was operating the vehicle with Eatman\u2019s permission at the time of the collision. Leitch\u2019s operation of the vehicle under these circumstances is covered under the excess policy SL231000 because he was \u201cusing with [Eatman\u2019s] permission a covered auto [Eatman] own[ed].\u201d\nB. Primary Rental Policy [SF231000]\nEmpire next argues that the trial court erred in declaring coverage under policies SF231000 and SX231000 because the two policies were for the benefit of rental vehicles only and that the accident in question arose out of the use of a non-rental vehicle by a non-insured individual. We disagree.\nPrimary Rental Policy SF231000 contains the following pertinent language:\nI. A: COVERED AUTOS\nCovered \u201cautos\u201d are those \u201cautos\u201d described in ITEM TWO of the Declarations for which a premium charge is shown in ITEM TWO and that:\n1. You use;\nII. A: COVERAGE \u2014 we will pay all sums an \u201cinsured\u201d legally must pay as damages . . . caused by an \u201caccident\u201d and resulting from the ownership, maintenance or use of a covered \u201cauto\u201d (emphasis added).\n1. Who is an Insured: you for any covered auto; your employee, but only while acting within the scope of his or her duties; and anyone else using w/ your 'permission a covered \u201cauto\u201d you own, except as set forth in section II. A. 2 (emphasis added)\n2. d. Who is not an Insured: someone using a covered auto while he or she is working in a business selling, moving, transporting, servicing, repairing or parking autos unless that business is yours, (emphasis added).\nThus, to obtain coverage the auto must be a \u201ccovered auto\u201d as defined in section I. A. and the person must be an \u201cinsured\u201d as defined in section II. A.\nUnder the initial policy, the \u201ccovered autos\u201d provision in section I, paragraph A, says \u201ccovered autos\u201d are \u201cspecifically described autos available for short-term rental to others\u201d, (emphasis added). However, paragraph A is rewritten in Endorsement EM0808GR, which amends the policy definition of \u201ccovered autos\u201d. It states:\nThis endorsement modifies insurance provided under the following:\nRental Auto Coverage Form\nSection I \u2014 Covered Autos, Paragraph A, WHICH AUTOS ARE COVERED is changed to read as follows:\nA. WHICH AUTOS ARE COVERED AUTOS\nOWNED \u201cAUTOS\u201d \u2014 Those \u201cautos\u201d you own are covered \u201cautos.\u201d This includes those \u201cautos\u201d you acquire ownership of after the policy begins.\nThe effect of the endorsement was to replace the Standard Code Symbol System which used symbols \u201c1-10\u201d to code the \u201ccovered autos\u201d. After the endorsement, only three types of \u201ccovered autos\u201d were defined in the policy: OWNED AUTOS, HIRED AUTOS, and NON-OWNED AUTOS. While the initial policy extended coverage for rental vehicles, the endorsement extended the definition of covered autos to include \u201cthose autos [Eatman] own[ed].\u201d Thus, the endorsement provisions are in conflict with the coverage provisions in the initial policy. \u201cWhen such a conflict is present, the provisions most favorable to the insured, i.e. those in the endorsement, are controlling.\u201d Drye v. Nationwide Mutual Ins. Co., 126 N.C. App. 811, 815, 487 S.E.2d 148, 150 (1997) (citation omitted).\nWith respect to the Primary Rental Policy, the vehicle owned by Eatman and driven by Leitch, was an OWNED AUTO, and thus a covered auto, as that term was defined in Endorsement EM0808GR. Eatman Leasing, Inc. is the named \u201cinsured\u201d under this policy. Leitch is an insured because he was operating a \u201ccovered auto\u201d with \u201cpermission\u201d of Eatman Leasing, Inc., and thus meets the definition of WHO IS AN INSURED under section II. A. 1. c. Finally, there is no exclusion under section II. A. 2. which would prevent Leitch from being covered. His use of the vehicle, driving from Rocky Mount to Wilmington, was for the benefit of Eatman\u2019s business (emphasis added).\nC. Excess Rental Policy [SX231000]\nThe final policy at issue in this case, Excess Rental Policy, SX231000, states in pertinent part:\nSection I A. \u201cwe will pay all sums an \u2018insured\u2019 legally must pay as damages in excess of the \u2018primary insurance\u2019 caused by an \u2018accident\u2019 and resulting from the ownership, maintenance of [sic] use of a covered \u2018auto\u2019. We will not provide coverage if the \u2018loss\u2019 is not covered under the primary insurance.\nSection III \u2014 \u201cunless a provision to the contrary appears in our policy, all the conditions, definitions, agreements, exclusions and limitations of the \u201cprimary insurance\u201d including changes by endorsement, will apply to our Coverage form.\u201d [Primary policy SF 231000]\nDeclarations page: \u201cdescription of automobile(s) \u2014 covered autos as defined by the underlying primary insurer.\u201d\nThis Excess Rental Policy directly and specifically references Primary Rental Policy, SF231000. (See previous discussion of SF231000 in section B of this opinion.) The Excess Rental Policy insures the same \u201ccovered autos\u201d as the Primary Rental Policy. The term \u201cinsured\u201d is defined in part in the Excess Rental Policy as \u201cany person or organization qualifying as an \u201cinsured\u201d in the \u201cWho is an Insured\u201d provision of the primary insurance.\u201d Inasmuch as both Eatman and Leitch are insureds under the Primary Rental Policy and the Excess Rental Policy incorporates the key definitions from the Primary Rental Policy, we find that Eatman and Leitch are covered under the Excess Rental Policy.\nAccordingly, we conclude that the trial court did not err in granting the summary judgment motion and finding that all four policies afforded coverage to Eatman Leasing and Leitch.\nII.\nEmpire\u2019s final argument is that the trial court erred in declaring that the four policies provided supplemental payments for prejudgment interest over the policy limits. Again, we disagree.\nWhen a statute is applicable to the terms of an insurance policy, \u201cthe provisions of that statute become terms of the policy to the same extent as if they were written in it, and if the terms of the policy conflict with the statute, the provisions of the statute prevail.\u201d Baxley v. Nationwide Mut. Ins. Co., 334 N.C. 1, 6, 430 S.E.2d 895, 898 (1993) (citation omitted). The prejudgment interest statute, N.C.G.S. \u00a7 24-5, states in pertinent part:\n(b) Other Action \u2014 In an action other than contract, any portion of a money judgment designated by the fact finder as compensatory damages bears interest from the date the action is commenced until the judgment is satisfied.\nN.C.G.S. \u00a7 24-5(b) (2000).\nHowever, our Supreme Court has previously held that N.C.G.S. \u00a7 24-5 is not a part of the Financial Responsibility Act so as to be written into every liability policy. Sproles v. Greene, 329 N.C. 603, 613, 407 S.E.2d 497, 503 (1991). Thus, when the statute is not applicable to the terms of an insurance policy, \u201ca liability insurer\u2019s obligation to pay interest in addition to its policy limits is governed by the language of the policy.\u201d Nationwide Mut. Ins. Co. v. Mabe, 342 N.C. 482, 490, 467 S.E.2d 34, 39 (1996) quoting Baxley v. Nationwide Mut. Ins. Co., 334 N.C. 1, 6, 430 S.E.2d 895, 898 (1993).\nOur courts have addressed the issue of prejudgment interest in several cases. In each case the court determined whether an insurer was required to pay interest beyond the policy limits based on the language in the policy. Based upon our review of those cases, we find the decision in Lowe v. Tarble, 313 N.C. 460, 329 S.E.2d 648 (1985), to be directly applicable to the case sub judice. In Lowe the insurer expressly agreed to pay, \u201call costs taxed against the insured,\u201d in addition to its contractual limit of liability. Id. at 463, 329 S.E.2d at 651. Our Supreme Court held that \u201cprejudgment interest provided for by N.C.G.S. 24-5 is a cost within the meaning of the contract which, under the contract in the present case, the insurer is obligated to pay.\u201d Id. at 464, 329 S.E.2d at 651.\nEmpire contends that Lowe should not control in the instant case because other cases decided since Lowe (Sproles v. Greene, 329 N.C. 603, 407 S.E.2d 497 (1991); Baxley v. Nationwide Mut. Ins. Co., 334 N.C. 1, 430 S.E.2d 895 (1993); and Nationwide Mut. Ins. Co. v. Mabe, 342 N.C. 482, 467 S.E.2d 34 (1996)) have held that prejudgment interest constitutes damages, not costs, and as such, it is to be paid by the insurer as a part of the judgment up to the insurers\u2019 limits of liability. We disagree and distinguish the cases cited by Empire and conclude that the holding in Lowe does control in this case.\nIn Sproles v. Greene, 329 N.C. 603, 611-12, 407 S.E.2d 497, 503 (1991), the Court held that \u201cunder the language of the policy . . . [the insurer] has agreed to pay, in excess of its liability limits, only the costs of defense and not all costs taxed against the insured, and [thus] Lowe is not controlling.\u201d The Sproles court distinguished its case from Lowe because the phrase \u201call defense costs we incur\u201d contained in the policy under review in Sproles was not as broad as the phrase \u201call costs taxed against the insured\u201d contained in the policy under review by the Lowe court. Id. at 611, 407 S.E.2d 497 at 502. Therefore, based on the specific terms of the contract, prejudgment interest was applicable only to all defense costs, albeit in excess of the liability limits.\nIn Baxley, the Court interpreted the following contractual language to support its holding that the UIM carrier was obligated to pay prejudgment interest up to its policy limits:\n[UIM carrier promises to pay] damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of:\n1. Bodily injury sustained by a covered person and caused by an accident; and\n2. Property damage caused by an accident.\nBaxley at 6-7, 430 S.E.2d at 899. (emphases added)\nThe contract in Baxley did not define damages, thus the Court construed this ambiguity against the drafter, the UIM carrier, and found the definition of damages to include the compensatory damage amount awarded by the jury as well as prejudgment interest. We distinguish Baxley because the Court therein analyzed liability language in the primary policy, but did not completely analyze the supplementary payment provisions of that policy which is at issue in the case sub judice. However, the Baxley Court noted that the \u201cspecific prejudgment interest provision [in the supplementary payment provisions] is not rendered \u201csuperfluous\u201d by a finding that prejudgment interest is also an element of a plaintiff\u2019s damages.\u201d Id. at 10-11, 430 S.E.2d at 901. Further, the Baxley Court distinguished Lowe v. Tarble by indicating that \u201cLowe dealt with a supplementary payments provision in the liability section of a policy in which the insurer agreed to pay \u201call costs\u201d taxed against the insured \u201cin addition to the applicable limit\u201d of the policy.\u201d Id. at 11, 430 S.E.2d at 901 (citation omitted). Such specific provisions obligate the carrier to pay prejudgment interest \u201cin addition to its policy limits.\u201d Id. at 10, 430 S.E.2d at 901. Therefore, under our reading of Baxley, an award of prejudgment interest would not be precluded where the specific language of the contract provides for such interest in addition to the policy limits.\nIn Mabe, the policy at issue addressed prejudgment interest, post-judgment interest, costs taxed, and defense costs. Mabe at 492, 467 S.E.2d at 40. The Mabe policy had a provision which defined prejudgment interest as part of damages, leading the Court to conclude \u201cthat the definition clause expressly including prejudgment interest as an element of damages control [led] the determination of whether prejudgment interest is payable beyond the policy limits.\u201d Id.\nThe cases discussed \u2014 Sproles, Baxley and Mabe \u2014 clearly indicate that prejudgment interest issues will be decided by our courts based upon the court\u2019s interpretation of the specific insurance policy under review in each particular case. Mabe at 491, 467 S.E.2d at 39.\nIn the case sub judice the four policies issued to Eatman have a provision for payment of either \u201call costs\u201d or \u201call . . . interest incurred\u201d in addition to liability limits. The policies contain no specific language discussing prejudgment interest as damages. The primary policies, SG231000 and SF231000, have identical prejudgment interest language which provides:\n4. COVERAGE EXTENSIONS\na. Supplementary Payments:\nIn addition to the Limit of Insurance, we will pay for the \u201cinsured\u201d:\n(5) All costs taxed against the \u201cinsured\u201d in any \u201csuit\u201d we defend; (emphasis added)\nThe excess policies, SL231000 and SX231000 provide:\nIf we exercise this right [to defend the case], we will assume our proportionate share of all court costs, legal fees, investigation costs and interest incurred with our consent, (emphasis added).\nThe \u201call costs\u201d language in these policies is almost identical to the policy language in Lowe. Therefore, following the ruling in Lowe and applying it to the policies at issue here we conclude the \u201call costs\u201d language of the policies includes prejudgment interest. Further, the policies clearly provide that supplementary payments are in addition to the policy limits. Accordingly, we affirm the trial court\u2019s ruling that the four policies provided supplemental payments for prejudgment interest over the policy limits.\nAFFIRMED.\nChief Judge EAGLES and Judge McCULLOUGH concur.", "type": "majority", "author": "BRYANT, Judge." } ], "attorneys": [ "Poyner & Spruill, LLP., by Randall R. Adams for Plaintiff - Appellee Eatman Leasing, Inc.", "Marshall, Williams, & Gorham, LLP., by W. Robert Cherry, Jr. for Plaintiff-Appellee Leitch.", "McGuire, Woods, Battle & Boothe, LLP, by Kurt E. Lindquist, II and Arden Lynn Achenberg for Defendant-Appellant.", "Thompson, Smyth & Gioffi, LLP., by Theodore B. Smyth for Defendant-Appellee Shipley." ], "corrections": "", "head_matter": "EATMAN LEASING, INC and RUSSELL O. LEITCH, SR. Plaintiffs-Appellees v. EMPIRE FIRE & MARINE INSURANCE COMPANY, Defendant-Appellant, and DOUGLAS W. SHIPLEY, Defendant-Appellee\nNo. COA00-571\n(Filed 7 August 2001)\n1. Insurance\u2014 automobile \u2014 excess liability coverage\nThe trial court did not err in an action arising out of an automobile accident by granting summary judgment in favor of defendant driver and finding that all four business auto insurance policies afforded coverage to plaintiffs, because: (1) defendant insurer did not dispute that plaintiffs are covered under the primary garage policy; (2) plaintiff driver\u2019s operation of the vehicle was covered under the excess garage policy when plaintiff was using with plaintiff company\u2019s permission a covered auto owned by the company; (3) plaintiff driver\u2019s operation of the vehicle was covered under the primary rental policy when the car driven by plaintiff was an owned auto covered under the policy, plaintiff company is the named insured under this policy, plaintiff driver was operating a covered auto with the permission of plaintiff company, and there is no exclusion preventing plaintiff driver from being covered; and (4) plaintiff driver\u2019s operation of the vehicle was covered under the excess rental policy when it incorporates the key definitions from the primary rental policy, and both plaintiffs are insureds under the primary rental policy.\n2. Insurance\u2014 automobile \u2014 supplemental payments \u2014 prejudgment interest over policy limits\nThe trial court did not err in an action arising out of an automobile accident by declaring that all four business auto insurance policies provided supplemental payments for prejudgment interest over the policy limits, because: (1) prejudgment interest issues are decided based upon the court\u2019s interpretation of the specific insurance policy under review in each particular case; (2) the four policies in this case have a provision for payment of either all costs or all interest incurred in addition to liability limits, and therefore the \u201call costs\u201d language of the policies includes prejudgment interest; and (3) the policies provide that supplementary payments are in addition to the policy limits.\nAppeal by Defendant, Empire Fire & Marine Insurance Company from judgment entered on 17 February 2000 by Judge W. Allen Cobb, Jr. in New Hanover County Superior Court. Heard in the Court of Appeals on 20 April 2001.\nPoyner & Spruill, LLP., by Randall R. Adams for Plaintiff - Appellee Eatman Leasing, Inc.\nMarshall, Williams, & Gorham, LLP., by W. Robert Cherry, Jr. for Plaintiff-Appellee Leitch.\nMcGuire, Woods, Battle & Boothe, LLP, by Kurt E. Lindquist, II and Arden Lynn Achenberg for Defendant-Appellant.\nThompson, Smyth & Gioffi, LLP., by Theodore B. Smyth for Defendant-Appellee Shipley." }, "file_name": "0278-01", "first_page_order": 308, "last_page_order": 320 }