{
  "id": 8915747,
  "name": "JOHN ALDEN LIFE INSURANCE COMPANY, Plaintiff v. NORTH CAROLINA INSURANCE GUARANTY ASSOCIATION, Defendant",
  "name_abbreviation": "John Alden Life Insurance v. North Carolina Insurance Guaranty Ass'n",
  "decision_date": "2004-01-06",
  "docket_number": "No. COA03-229",
  "first_page": "167",
  "last_page": "171",
  "citations": [
    {
      "type": "official",
      "cite": "162 N.C. App. 167"
    }
  ],
  "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": "448 S.E.2d 532",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "weight": 2,
      "year": 1994,
      "pin_cites": [
        {
          "parenthetical": "Internal Citations omitted, emphasis in original."
        }
      ],
      "opinion_index": 0
    },
    {
      "cite": "337 N.C. 696",
      "category": "reporters:state",
      "reporter": "N.C.",
      "case_ids": [
        2549728,
        2551586,
        2549528,
        2550457,
        2549373
      ],
      "year": 1994,
      "opinion_index": 0,
      "case_paths": [
        "/nc/337/0696-05",
        "/nc/337/0696-03",
        "/nc/337/0696-04",
        "/nc/337/0696-02",
        "/nc/337/0696-01"
      ]
    },
    {
      "cite": "444 S.E.2d 464",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "year": 1994,
      "pin_cites": [
        {
          "page": "473",
          "parenthetical": "citations omitted"
        }
      ],
      "opinion_index": 0
    },
    {
      "cite": "115 N.C. App. 175",
      "category": "reporters:state",
      "reporter": "N.C. App.",
      "case_ids": [
        12125796
      ],
      "year": 1994,
      "pin_cites": [
        {
          "page": "190",
          "parenthetical": "citations omitted"
        }
      ],
      "opinion_index": 0,
      "case_paths": [
        "/nc-app/115/0175-01"
      ]
    },
    {
      "cite": "N.C. Gen. Stat. \u00a7 58-48-20",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "opinion_index": 0
    },
    {
      "cite": "N.C. Gen. Stat. \u00a7 58-48-35",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "opinion_index": 0
    },
    {
      "cite": "N.C. Gen. Stat. \u00a7 58-48-5",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "pin_cites": [
        {
          "parenthetical": "stating that the Guaranty Association was created to ensure North Carolina citizens \"avoid financial loss . . . [as] policy holders because of the insolvency of an insurer.\""
        }
      ],
      "opinion_index": 0
    }
  ],
  "analysis": {
    "cardinality": 402,
    "char_count": 7817,
    "ocr_confidence": 0.767,
    "pagerank": {
      "raw": 4.03580807328026e-08,
      "percentile": 0.21239037488285997
    },
    "sha256": "6c3226e34b38487d30916b208fa8fb2fcd276f9417907d8acc4a0377a2a5ad5f",
    "simhash": "1:10891a4cd8dbec47",
    "word_count": 1179
  },
  "last_updated": "2023-07-14T16:27:54.754463+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Judges TIMMONS-GOODSON and McCULLOUGH concur."
    ],
    "parties": [
      "JOHN ALDEN LIFE INSURANCE COMPANY, Plaintiff v. NORTH CAROLINA INSURANCE GUARANTY ASSOCIATION, Defendant"
    ],
    "opinions": [
      {
        "text": "WYNN, Judge.\nBy this appeal, John Alden Life Insurance Company ( John Alden Insurance\u201d) seeks reversal of the trial court\u2019s summary judgment order dismissing all of its claims against North Carolina Insurance Guaranty Association (\u201cGuaranty Association\u201d). After careful review, we reverse and remand.\nThe facts giving rise to this case are not disputed. On 28 July 1997, David Nugent suffered a severe heart attack during the course of his employment at Republic Industries. To cover the cost of his extensive medical treatment, which included a heart transplant, Mr. Nugent submitted claims to his health insurance carrier, John Alden Insurance, and his employer\u2019s worker\u2019s compensation insurance carrier, Credit General Insurance Company (\u201cCredit General\u201d). Although the policy issued by John Alden Insurance specifically excluded from coverage compensable workers\u2019 compensation injuries, John Alden Insurance began paying for Mr. Nugent\u2019s medical care because it was unaware that Mr. Nugent\u2019s injury was work-related.\nIn the meantime, Credit General denied worker\u2019s compensation insurance coverage for Mr. Nugent\u2019s injuries. Mr. Nugent appealed to the North Carolina Industrial Commission and while the matter was pending, Credit General was declared insolvent. As a result, Guaranty Association became a party to Mr. Nugent\u2019s worker\u2019s compensation action. See N.C. Gen. Stat. \u00a7 58-48-5 (stating that the Guaranty Association was created to ensure North Carolina citizens \u201cavoid financial loss . . . [as] policy holders because of the insolvency of an insurer.\u201d).\nOn 18 September 2001, the Industrial Commission issued an Order and Award, requiring that Guaranty Association \u201cpay for all medical treatment as a result of the plaintiff\u2019s heart attack.\u201d Guaranty Association did not appeal from that decision; accordingly, it began paying for Mr. Nugent\u2019s medical care expenses. However, Guaranty Association refused to reimburse John Alden Insurance for the $722,335.62 expended on Mr. Nugent\u2019s care prior to the Industrial Commission\u2019s Order. In response, John Alden Insurance brought the subject action against Guaranty Association to recover payments made for Mr. Nugent\u2019s medical care.\nFrom the trial court\u2019s grant of summary judgment in favor of Guaranty Association, John Alden Insurance argues on appeal that the trial court erred because its claim for reimbursement arises from an entitlement for equitable subrogation. We agree.\nUnder N.C. Gen. Stat. \u00a7 58-48-35, the Guaranty Association \u201cshall be obligated to the extent of the covered claims existing prior to the determination of insolvency.\u201d The statute defines covered claims as follows:\n\u2018Covered claim\u2019 means an unpaid claim ... which... arises out of and is within the policy... as issued by an insurer, if such insurer becomes an insolvent insurer... \u2018Covered claim\u2019 shall not include any amount . . . due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation or contribution recoveries or otherwise.\nN.C. Gen. Stat. \u00a7 58-48-20. Thus, under the plain language of the statute, Guaranty Association is not obligated to pay subro-gation claims.\nHowever, this Court has distinguished conventional subrogation claims from equitable subrogation claims:\nAn insurer asserting a [conventional] subrogation claim rightfully paid damages for its insured, in the first instance, under its policy, but contends that another party is primarily liable for the damages. By contrast, an insurer asserting an equitable subrogation claim did not owe the claim, in the first instance; it was owed by another insurer who wrongfully refused to pay the claim.\nNorth Carolina Ins. Guar. Ass\u2019n v. Century Indem. Co., 115 N.C. App. 175, 190, 444 S.E.2d 464, 473 (1994) (citations omitted) (emphasis in original), cert. denied, 337 N.C. 696, 448 S.E.2d 532 (1994). In Century, this Court held Guaranty Association liable for Plaintiff\u2019s equitable subrogation claim and explained:\nThis Court has stated that while conventional subrogation \u201carises from an express agreement of the parties,\u201d equitable subrogation \u201crests not on contract but on principles equity.\u201d Furthermore, this Court has held that equitable subrogation is a \u201cremedy [which] is highly favored and liberally applied.\u201d We conclude that our General Assembly did not intend for the term \u201csubrogation\u201d to encompass equitable subrogation ....\nId. (Internal Citations omitted, emphasis in original.)\nIn this case, John Alden Insurance paid for Mr. Nugent\u2019s medical expenses in good faith, lacking knowledge that Mr. Nugent\u2019s heart attack was a compensable workers\u2019 compensation injury. Not until the Industrial Commission issued its Opinion and Award on 18 September 2001 did John Alden Insurance know Mr. Nugent\u2019s claim arose out of and as a result of his work at Republic Industries, and was thus specifically excluded from coverage under the explicit language of the policy\u2019s \u201cCharges Not Covered\u201d provision, which states:\nFor treatment of any Injury or Illness that arises out of, or as the result of; any work for wage or profit, paid or payable under the Workers\u2019 Compensation Act; except that, this exclusion will not apply to:\na. the sole proprietor, if the Employer is a proprietorship;\nb. a partner of the Employer, if the Employer is a partnership;\nc. an executive officer of the Employer, if the Employer is a corporation;\nfor any treatment that results from Injury or Illness that arises out of or as a result of any work for the Employer and then only if he or she is not required to have coverage under any Workers Compensation Act or similar law and does not have such coverage.\n[Appendix A, Health Insurance Policy, Rider p. 7, Policy p. 19]\nNotwithstanding this exclusion under John Alden Insurance\u2019s policy, Guaranty Association asserts that \u201c[d]uring those three and a half years that the worker\u2019s compensation claim was either not filed or denied, John Alden remained contractually and primarily obligated to pay the medical expenses of Mr. Nugent.\u201d We disagree. To the contrary, as in Century, John Alden Insurance presented an equitable subrogation claim based upon payments made for injuries that arose from an uncovered event \u2014 a work-related injury payable under the Workers Compensation Act. Since Mr. Nugent suffered from an injury compensable under the Workers Compensation Act, under the policy provided by John Alden Insurance, he was not entitled to coverage.\nAccordingly, the trial court erred in granting Guaranty Association\u2019s motion for summary judgment. Indeed, under the facts of this case, we remand this matter to the trial court for entry of summary judgment in favor of John Alden Insurance.\nReversed and remanded.\nJudges TIMMONS-GOODSON and McCULLOUGH concur.",
        "type": "majority",
        "author": "WYNN, Judge."
      }
    ],
    "attorneys": [
      "Allen Mills of Frederic E. Toms & Associates, P.L.L.C., for the Plaintiff",
      "Christopher J. Blake and Betsy Cooke of Moore & Van Allen, P.L.L.C., for the Defendant."
    ],
    "corrections": "",
    "head_matter": "JOHN ALDEN LIFE INSURANCE COMPANY, Plaintiff v. NORTH CAROLINA INSURANCE GUARANTY ASSOCIATION, Defendant\nNo. COA03-229\n(Filed 6 January 2004)\nWorkers\u2019 Compensation\u2014 payment of medical expenses \u2014 equitable subrogation\nPlaintiff health insurer\u2019s claim against the Insurance Guaranty Association (IGA) on behalf of an insolvent workers\u2019 compensation carrier for payment of an insured\u2019s medical expenses after a work-related heart attack constituted a claim for equitable subrogation for which the IGA was liable where plaintiff paid the medical expenses in good faith without knowledge that the heart attack was a compensable workers\u2019 compensation injury, and the health insurance policy excluded from coverage compensable workers\u2019 compensation injuries.\nAppeal by Plaintiff from judgment entered 22 November 2002 by Judge Stafford G. Bullock in Superior Court, Wake County. Heard in the Court of Appeals 18 November 2003.\nAllen Mills of Frederic E. Toms & Associates, P.L.L.C., for the Plaintiff\nChristopher J. Blake and Betsy Cooke of Moore & Van Allen, P.L.L.C., for the Defendant."
  },
  "file_name": "0167-01",
  "first_page_order": 195,
  "last_page_order": 199
}