{ "id": 8525725, "name": "ARTHUR BENNETT MANNING and wife, LUGENE MANNING v. CLARENCE ERNEST FLETCHER, JR. and NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY", "name_abbreviation": "Manning v. Fletcher", "decision_date": "1988-09-20", "docket_number": "No. 877SC1136", "first_page": "393", "last_page": "399", "citations": [ { "type": "official", "cite": "91 N.C. App. 393" } ], "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": "338 S.E. 2d 92", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "315 N.C. 341", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4716667 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/315/0341-01" ] }, { "cite": "317 S.E. 2d 682", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "opinion_index": 0 }, { "cite": "311 N.C. 306", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4684257, 4686607, 4682963, 4684918, 4681629 ], "year": 1984, "opinion_index": 0, "case_paths": [ "/nc/311/0306-01", "/nc/311/0306-02", "/nc/311/0306-05", "/nc/311/0306-03", "/nc/311/0306-04" ] }, { "cite": "313 S.E. 2d 856", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1984, "pin_cites": [ { "page": "859" }, { "page": "860", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "67 N.C. App. 632", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526991 ], "weight": 2, "year": 1984, "pin_cites": [ { "page": "636" } ], "opinion_index": 0, "case_paths": [ "/nc-app/67/0632-01" ] }, { "cite": "342 S.E. 2d 523", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "316 N.C. 551", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4702590 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/316/0551-01" ] }, { "cite": "336 S.E. 2d 709", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 0 }, { "cite": "78 N.C. App. 140", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8519858 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc-app/78/0140-01" ] } ], "analysis": { "cardinality": 466, "char_count": 10978, "ocr_confidence": 0.829, "pagerank": { "raw": 3.412121717113371e-07, "percentile": 0.8780687599933432 }, "sha256": "919b2bc6a81b5795b1a9803aee7da06a06dd159e90da7b7bcbc99df9d64a9b16", "simhash": "1:5f29177e73ed15e2", "word_count": 1684 }, "last_updated": "2023-07-14T21:33:36.579827+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges Arnold and Greene concur." ], "parties": [ "ARTHUR BENNETT MANNING and wife, LUGENE MANNING v. CLARENCE ERNEST FLETCHER, JR. and NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY" ], "opinions": [ { "text": "ORR, Judge.\nThe sole issue on appeal is whether the trial court erred by not reducing Farm Bureau\u2019s underinsured motorist coverage obligation by the total amount of workers\u2019 compensation paid to plaintiff.\nN.C.G.S. \u00a7 20-279.21(b)(4) requires insurers to provide underinsured motorist coverage to the extent that \u201cthe limit of payment is only the difference between the limits of the liability insurance that is applicable and the limits of the underinsured motorist coverage as specified in the owner\u2019s policy.\u201d This effectively limits the payment to the difference between defendant Fletcher\u2019s liability coverage ($25,000) and the limits of defendant Farm Bureau\u2019s underinsured motorist coverage as specified in the policy ($100,000). See Davidson v. U S. Fidelity and Guar. Co., 78 N.C. App. 140, 336 S.E. 2d 709 (1985), aff\u2019d per curiam, 316 N.C. 551, 342 S.E. 2d 523 (1986). Neither defendant Farm Bureau nor plaintiff Manning dispute that the maximum amount of Farm Bureau\u2019s liability is $75,000 under N.C.G.S. \u00a7 20 279.21(b)(4).\nFarm Bureau argues that the $75,000 amount may be further reduced by the amount of workers\u2019 compensation paid to plaintiff ($59,000) under its limit of liability provision in its underinsured motorist liability policy with plaintiffs employer.\nThe policy language in question states:\nOur limit of liability\n2. Any amount payable under this insurance shall be reduced by:\na. All sums paid or payable under any workers\u2019 compensation, disability benefits or similar law exclusive of non-occupational disability benefits and\nPursuant to the above policy language and other evidence, the trial court made the following findings of fact and conclusions of law:\n5. That North Carolina Farm Bureau Mutual Insurance Company, underinsured motorist carrier, is obligated to pay the plaintiffs the difference between the stated limit of the underinsured motorist coverage in its policy of $100,000.00 and the limit of the liability insurance paid by State Farm Mutual Insurance Company on behalf of the defendant, Fletcher, in the amount of $25,000.00; that North Carolina Farm Bureau Mutual Insurance Company, as underinsured motorist carrier, is obligated to pay the plaintiffs the sum of $75,000.00 pursuant to its policy and the North Carolina Vehicle Safety and Financial Responsibility Act, N.C. Gen. Stat. 20-279.21(b)(4).\n6. That North Carolina Farm Bureau Mutual Insurance Company is not entitled to reduce its underinsured motorist coverage to the plaintiffs in the amount of $75,000.00 because of benefits paid to the plaintiff, Arthur Bennett Manning, pursuant to the North Carolina Workers\u2019 Compensation Act; that such reduction is not permitted by either N.C. Gen. Stat. 20-279.21(b)(4) or N.C. Gen. Stat. 20-279.21(e) of the North Carolina Motor Vehicles Safety and Financial Responsibility Act.\n7.That North Carolina Farm Bureau Mutual Insurance Company, as workers compensation carrier, is entitled to subrogation against the proceeds of the underinsured motorist coverage afforded by North Carolina Farm Bureau Mutual Insurance Company, as the underinsured motorist carrier, up to $34,000.00, pursuant to N.C. Gen. Stat. 97-10.2 et seq.\nWHEREFORE, it is hereby ordered, adjudged and decreed, that:\n2. The payment of $25,000.00 by State Farm Mutual Insurance Company to plaintiffs for subsequent distribution to North Carolina Farm Bureau Mutual Insurance Company, workers\u2019 compensation carrier, and plaintiffs\u2019 counsel is accomplished by agreement of the parties and is not considered under this declaratory judgment action.\n3. North Carolina Farm Bureau Mutual Insurance Company, as underinsured carrier, is obligated to pay the plaintiffs the sum of $75,000.00, and shall pay said sum to the plaintiffs with interest at the legal rate from the date of this judgment together with the costs of this action.\n4. The plaintiffs shall have $41,000.00 of the $75,000.00 paid by North Carolina Farm Bureau Mutual Insur\u00e1nce Company, underinsured motorist insurer, free and clear of any claim or lien by any other party to this action; that the plaintiffs are to retain the balance of $34,000.00, until such time as the Court, in its discretion, shall distribute the $34,000.00 between the plaintiff, Arthur Bennett Manning, and North Carolina Farm Bureau Mutual Insurance Company, workers\u2019 compensation carrier.\nDefendant argues that the limit of liability policy language complies with N.C.G.S. \u00a7 20-279.21(e); thus defendant\u2019s liability for $75,000 should be further reduced by the $59,000 workers\u2019 compensation plaintiff received. We disagree.\nUnder N.C.G.S. \u00a7 20-279.21(e) \u201c[s]uch motor vehicle liability policy need not insure against loss from any liability for which benefits are in whole or in part either payable or required to be provided under any workmen\u2019s compensation law . . . .\u201d\nWe find little assistance from the courts of this state in interpreting subsection (e). In South Carolina Ins. Co. v. Smith, 67 N.C. App. 632, 313 S.E. 2d 856, disc. rev. denied, 311 N.C. 306, 317 S.E. 2d 682 (1984), this Court invalidated an employee exclusion clause in an insurance policy which completely denied coverage for injury (to any employee) during the scope of employment, and held that under N.C.G.S. \u00a7 20-279.21(e), an insurer may not completely exclude an employee from policy coverage unless workers\u2019 compensation is available. \u201c[T]he validity of the exclusion is contingent on the existence of workers\u2019 compensation.\u201d Id. at 634, 313 S.E. 2d at 859.\nIt is important to note that Smith was a general auto liability insurance case which stated that if there was a showing of workers\u2019 compensation coverage for the employee, the employer could exclude any coverage under his liability policy.\nIn the case sub judice, the employer, however, has chosen to provide to the employee liability insurance coverage and provided pursuant to N.C.G.S. \u00a7 20-279.21(b)(4) underinsured motorist coverage. The underinsured motorist coverage limits are controlled by N.C.G.S. \u00a7 20-279.21(b)(4) and the parties admit that $75,000 is the applicable amount.\nThere is no statutory provision allowing, nor does Smith permit, an additional reduction in the amount of underinsured coverage by deducting workers\u2019 compensation benefits paid to the employee.\nThe employer can choose not to furnish liability insurance for an employee provided there is workers\u2019 compensation coverage. N.C.G.S. \u00a7 20-279.21(e) (1983). However, once the choice is made to provide coverage, and underinsured coverage limits are not stated in the policy, the limit on underinsured coverage to be paid is determined by the statute.\nAs discussed in Smith, the Financial Responsibility Act\u2019s (Chapter 20, Article 9A of the North Carolina General Statutes) primary purpose is \u201cto compensate innocent victims who have been injured by financially irresponsible motorists. . . . Furthermore, the Act is to be liberally construed so that the beneficial purpose intended by its enactment may be accomplished.\u201d South Carolina Ins. Co. v. Smith, 67 N.C. App. at 636, 313 S.E. 2d at 860 (citation omitted). See also American Tours, Inc. v. Liberty Mutual Ins. Co., 315 N.C. 341, 338 S.E. 2d 92 (1986). The interpretation advocated by Farm Bureau clearly does not comport with this purpose. If such was the law, then Farm Bureau could totally avoid any underinsured coverage if the amount of workers\u2019 compensation benefits paid were greater than the stated limits in the policy. Such is not the law, however.\nPursuant to N.C.G.S. \u00a7 97-10.2(j), the employer\u2019s insurance company can be subrogated for the amount of workers\u2019 compensation paid by it to the employee. In the case sub judice Farm Bureau has received $25,000 via a previous settlement and can collect the balance as provided by statute.\nThe trial court\u2019s decision is affirmed.\nAffirmed.\nJudges Arnold and Greene concur.", "type": "majority", "author": "ORR, Judge." } ], "attorneys": [ "Ralph G. Willey, P.A., by Ralph G. Willey, III, attorney for plaintiff-appellees.", "Poyner & Spruill, by Ernie K. Murray, attorney for defendant-appellant." ], "corrections": "", "head_matter": "ARTHUR BENNETT MANNING and wife, LUGENE MANNING v. CLARENCE ERNEST FLETCHER, JR. and NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY\nNo. 877SC1136\n(Filed 20 September 1988)\nInsurance \u00a7 69; Master and Servant \u00a7 89.4\u2014 underinsured motorist coverage \u2014 no reduction for workers\u2019 compensation payments \u2014 subrogation by compensation carrier\nWhere an employer provided an employee automobile liability and under-insured motorist insurance coverage, and the employee was injured in an automobile accident during the course and scope of his employment, the automobile insurer was not entitled to reduce its underinsured motorist obligation to the employee by the amount of workers\u2019 compensation paid to the employee. However, pursuant to N.C.G.S. \u00a7 97-10.2(j), the compensation insurer can be subrogated for the amount of workers\u2019 compensation paid by it to the employee. N.C.G.S. \u00a7 20-279.21(e).\nAppeal by defendant North Carolina Farm Bureau Mutual Insurance Company from Brown (Frank RJ, Judge. Judgment , entered 26 August 1987 in Superior Court, NASH County. Heard in the Court of Appeals 13 April 1988.\nPlaintiff Arthur Manning was injured in an automobile accident on 13 March 1985 sustaining damages in excess of $100,000. Plaintiff and his wife, Lugene Manning, brought suit against defendant Fletcher for negligence and loss of consortium in excess of $750,000. Fletcher had liability insurance in the amount of $25,000 through State Farm Insurance Company. Pursuant to agreement in the pretrial order, State Farm paid plaintiff $25,000, discharging Fletcher from further liability. Pursuant to the same pretrial order, this $25,000 was to be distributed to defendant North Carolina Farm Bureau Mutual Insurance Company (hereinafter Farm Bureau) in partial satisfaction of workers\u2019 compensation benefits.\nPlaintiffs injury occurred in the course and scope of his employment. Through his employer, Devon Edwards, plaintiff had underinsured motorist coverage from defendant Farm Bureau in the face amount of $100,000. Edwards also maintained separate workers\u2019 compensation coverage on his employees through Farm Bureau. Plaintiff received $59,000 in workers\u2019 compensation benefits from Farm Bureau.\nOn 22 July 1987, an Order on Final Pretrial Conference was signed by counsel for plainitffs, and defendants Fletcher and Farm Bureau. Said pretrial order adds Farm Bureau as a party defendant, stipulates to defendant Fletcher\u2019s liability and release, and converts the action to one for declaratory judgment to determine the extent of Farm Bureau\u2019s liability under its underinsured motorist coverage. Judge Frank R. Brown signed the pretrial order on 22 July 1987. Judgment was entered for plaintiff on 26 August 1987, adjudging Farm Bureau\u2019s underinsured motorist coverage obligation to plaintiff in the amount of $75,000 subject to a subrogation claim for $34,000 in workers\u2019 compensation benefits paid to plaintiff. From this judgment Farm Bureau appeals.\nRalph G. Willey, P.A., by Ralph G. Willey, III, attorney for plaintiff-appellees.\nPoyner & Spruill, by Ernie K. Murray, attorney for defendant-appellant." }, "file_name": "0393-01", "first_page_order": 421, "last_page_order": 427 }