{
  "id": 8526860,
  "name": "JAMES EUGENE WILSON, JEANNETTE WILSON by her guardian ad litem, Ronald J. Short, and CHRISTOPHER WILSON by his guardian ad litem, Ronald J. Short v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY",
  "name_abbreviation": "Wilson v. State Farm Mutual Automobile Insurance",
  "decision_date": "1988-12-20",
  "docket_number": "No. 8821SC291",
  "first_page": "320",
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    "judges": [
      "Judges Johnson and Parker concur."
    ],
    "parties": [
      "JAMES EUGENE WILSON, JEANNETTE WILSON by her guardian ad litem, Ronald J. Short, and CHRISTOPHER WILSON by his guardian ad litem, Ronald J. Short v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY"
    ],
    "opinions": [
      {
        "text": "HEDRICK, Chief Judge.\nDefendant Farm Bureau first argues the evidence was not sufficient to support submission of the issues to the jury. We disagree. Compulsory automobile insurance coverage is provided to a driver if he is in \u201clawful possession\u201d of the automobile. G.S. 20-279.21. In this case, plaintiffs sought to prove Fields was in lawful possession of the. car he was driving at the time of the accident. Plaintiffs also sought to prove Fields was a spouse of the policyholder and resident of the same household. This would have provided voluntary coverage under the language of the policy.\nTaken in a light most favorable to plaintiffs, there was evidence both of Fields\u2019 lawful possession of the car and his residency being the same as that of his wife. There is evidence that Fields had driven the car before the accident, and his wife did not report the car as stolen or tell the investigating officer that Fields did not have permission to drive the car. This alone was some evidence of implied permission, and created an issue for the jury\u2019s resolution. See Bailey v. Insurance Co., 265 N.C. 675, 144 S.E. 2d 898 (1965). Likewise, Fields told police officers that his place of residence was the same as that of his wife. This and other evidence presented at trial made residency a proper issue for the jury\u2019s consideration. See Great American Ins. Co. v. Allstate Ins. Co., 78 N.C. App. 653, 338 S.E. 2d 145 (1986). Defendant Farm Bureau\u2019s argument is without merit.\nDefendant Farm Bureau next argues that \u201cthe trial court\u2019s instructions were clearly erroneous and misled and prejudiced the jury.\u201d Farm Bureau contends the instructions as to the first issue were erroneous because the court did not instruct that permission, either express or implied, is an essential element of lawful possession. Farm Bureau has failed to preserve this question for review because it did not object to the instructions at the end of the jury charge and before deliberations began as provided in Rule 10(b)(2) of the North Carolina Rules of Appellate Procedure.\nFarm Bureau admits it failed to object, but argues that based on Wall v. Stout, 310 N.C. 184, 311 S.E. 2d 571 (1984), its exception to the instructions on lawful possession is preserved despite its lack of formal objection. We disagree. In Wall v. Stout, our Supreme Court held that where a plaintiff objected to a defendant\u2019s proposed instructions throughout the charge conference it was unnecessary for the objections to be repeated following the charge. The Court stated that Rule 10(b)(2) was \u201cobviously designed to prevent unnecessary new trials caused by errors in instructions the court could have corrected if brought to its attention at the proper time.\u201d Id. at 188-89, 311 S.E. 2d at 574.\nIn the present case, even though the record shows there was much discussion as to what instructions would be given, no objections were made during the charge conference. Counsel for Farm Bureau at one point stated, \u201c. . . I would say that there\u2019s no reason to put in the charge anything about permission. . . .\u201d Farm Bureau cannot now complain about an instruction it did not object to and essentially consented to during the charge conference.\nDefendant Farm Bureau further argues the trial court\u2019s instruction on residency was erroneous in that it was incomplete and overbroad. Upon review of the record, we disagree. The trial court\u2019s instructions were taken from previous cases dealing with residency and were neither misleading nor overbroad. These arguments are without merit.\nDefendant Farm Bureau next argues the trial court exceeded its authority in ordering it to pay the amount of the consent judgment entered into by plaintiffs and Fields even though such an amount exceeded the policy limits. Farm Bureau\u2019s policy limits were $25,000 per person and $50,000 per accident. The consent judgment awarded $35,000 to James Wilson and $51,000 total. The trial court\u2019s rationale for ordering Farm Bureau to pay the total amount was that its \u201crefusal to defend . . . was unjustified, and was in bad faith regardless of any mistaken belief that the claim was outside their policy coverage.\u201d The trial court also concluded Farm Bureau had a duty to settle the claim and that Farm Bureau breached an implied covenant of good faith and fair dealing. Defendant contends such conclusions and the order entered were erroneous because the issue of bad faith was raised during a post-trial motion hearing, was raised by a party without standing to do so, was not decided by the jury, was not supported by competent evidence, and was contrary to the law of North Carolina.\nIn Indiana Lumbermen\u2019s Mutual Ins. Co. v. Champion, 80 N.C. App. 370, 376, 343 S.E. 2d 15, 19 (1986), this Court addressed the issue of duty to defend and bad faith on the part of insurance companies:\nThe obligation of a liability insurer to defend an action brought by an injured third party against the insured is absolute when the allegations of the complaint bring the claim within the coverage of the policy. Insurance Co. v. Insurance Co., 269 N.C. 358, 152 S.E. 2d 513 (1967); Stanback v. Westchester Fire Ins. Co., 68 N.C. App. 107, 314 S.E. 2d 775 (1984). See also Waste Management v. Insurance Co., slip op. no. 70PA85 (N.C., filed 18 February 1986). The insurer\u2019s refusal to defend the action is unjustified if it is determined that the action is in fact within the coverage of the policy. 14 Couch, Insurance 2d sec. 51:156 (1982). This is so even if the refusal to defend is based on the insurer\u2019s honest but mistaken belief that the claim is outside the policy coverage. Id.\nIn this case, the complaint in the action of plaintiffs against Fields is not in the record. The jury\u2019s verdict, however, determined the action was within the coverage of the policy. Defendant Farm Bureau\u2019s refusal to defend was therefore unjustified. Farm Bureau could not, if it had the opportunity, assert that it was an honest mistake since that is irrelevant. The judge, basing his decision on the jury\u2019s verdict, properly concluded that Farm Bureau\u2019s actions were unjustified.\nThis Court has further addressed the consequences of unjustified refusal to defend:\n. . . When an insurer without justification refuses to defend its insured, the insurer is estopped from denying coverage and is obligated to pay the amount of any reasonable settlement made in good faith by the insured of the action brought against him by the injured party.\nAmes v. Continental Casualty Co., 79 N.C. App. 530, 538, 340 S.E. 2d 479, 485, disc. rev. denied, 316 N.C. 730, 345 S.E. 2d 385 (1986).\nIn this case, because Farm Bureau unjustifiably refused to defend Fields, it \u201cis obligated to pay the amount of any reasonable settlement made in good faith. . . .\u201d The record, including the jury\u2019s verdict, discloses the insurer unjustifiably refused to defend Fields, and the insurer is obligated to pay a reasonable settlement made in good faith. No question is raised that the judgments totalling $51,000 was not a reasonable settlement made in good faith. Thus, the trial court, based on this record, had the authority to order defendant Farm Bureau to pay $51,000.\nWe find no error in the trial, and the judgment is affirmed.\nNo error and affirmed.\nJudges Johnson and Parker concur.",
        "type": "majority",
        "author": "HEDRICK, Chief Judge."
      }
    ],
    "attorneys": [
      "William Z. Wood for plaintiff, appellee.",
      "Petree Stockton & Robinson, by Robert J. Lawing and Richard J. Keshian, for defendant, appellant.",
      "Hutchins, Tyndall, Doughton & Moore, by Richard Tyndall and Laurie H. Woltz, for defendant, appellee."
    ],
    "corrections": "",
    "head_matter": "JAMES EUGENE WILSON, JEANNETTE WILSON by her guardian ad litem, Ronald J. Short, and CHRISTOPHER WILSON by his guardian ad litem, Ronald J. Short v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY\nNo. 8821SC291\n(Filed 20 December 1988)\n1. Insurance \u00a7 87.2\u2014 automobile liability insurance \u2014 lawful possession \u2014 resident of owner\u2019s household \u2014 sufficiency of evidence\nPlaintiffs\u2019 evidence was sufficient for the jury on issues as to whether a driver was in lawful possession of an automobile at the time of an accident and whether he was a resident of the same household as the owner where it tended to show that the car was owned by the driver\u2019s wife; the driver had driven the car before the accident, and his wife did not report the car as stolen or tell the investigating officer that the driver did not have permission to use the car; and the driver told police officers that his place of residence was the same as that of his wife.\n2. Appeal and Error \u00a7 50\u2014 instructions \u2014 failure to object at charge conference or before deliberations\nDefendant insurer cannot complain on appeal about an instruction to which it did not object and essentially consented during the charge conference and to which it failed to object before jury deliberations began. Appellate Rule 10(b)(2).\n3. Insurance \u00a7 100\u2014 automobile insurance \u2014 insurer\u2019s unjustified refusal to defend \u2014 consent judgment by insured \u2014 payment of amount over policy limits\nWhere the record, including the jury\u2019s verdict, disclosed that defendant automobile liability insurer unjustifiably refused to defend an insured driver in an action brought by plaintiffs, the trial court had the authority to order defendant to pay the amount of a reasonable consent judgment entered in good faith by plaintiffs and the driver even though such amount exceeded the limits of the policy issued by defendant.\nAPPEAL by defendant North Carolina Farm Bureau Mutual Insurance Company from Freeman, Judge. Judgment entered 16 November 1987 in Superior Court, FORSYTH County. Heard in the Court of Appeals 31 October 1988.\nThis is a civil action wherein plaintiffs seek a judgment declaring the liability of defendants and awarding them compensation pursuant to insurance policies with defendants. The following facts are uncontroverted: Plaintiffs were injured in a car accident with Eddie Darrell Fields on 2 June 1985. At the time, Eddie Fields was driving a car owned by his wife. His wife\u2019s car was covered by an insurance policy issued to her by defendant North Carolina Farm Bureau Mutual Insurance Company (\u201cFarm Bureau\u201d).\nPlaintiffs brought an action against both Fields and his wife. Farm Bureau defended Fields\u2019 wife but elected not to defend Fields because it believed Fields was not insured under his wife\u2019s policy. When the claim against Fields\u2019 wife was dismissed, plaintiffs proceeded only against Fields.\nAlthough defendant State Farm Mutual Automobile Insurance Company (\u201cState Farm\u201d) covered plaintiffs for uninsured and underinsured motorists, it failed to become involved in any settlement negotiations or proceedings. Fields, not represented by counsel, eventually entered into a consent judgment awarding $35,000 to James Eugene Wilson, $5,000 to Jeannette Wilson, and $11,000 to Christopher Wilson. Both Farm Bureau and State Farm then denied coverage.\nPlaintiffs then brought this action against defendants to determine liability and alleging bad faith on the part of State Farm. Two issues were submitted to and answered by the jury:\n1) Was Eddie Darrell Fields in lawful possession of the vehicle belonging to Fannie Porch Fields on June 2 1985?\nAnswer: Yes\n2) Was Eddie Darrell Fields a resident of the same household as Fannie Porch Fields on June 2, 1985?\nANSWER: Yes\nThe trial court entered a judgment making findings of fact and the following conclusions of law:\n1. North Carolina Farm Bureau Mutual Insurance Policy afforded coverage to Eddie Darrell Fields while operating the 1980 Chrysler owned by his wife Fannie Porch Fields on June 2, 1985.\n2. The allegations in the complaint brought by the Plaintiffs against Eddie Darrell Fields as the Defendant in 85 CVS 5891 brought the claim within coverage of the North Carolina Farm Bureau Mutual Insurance Policy in question.\n3. Under its motor vehicle liability insurance policy, North Carolina Farm Bureau Mutual Insurance Company had a duty to defend Eddie Darrell Fields in case number 85 CVS 5891, and it breached its contract when it wrongfully failed to defend Eddie Darrell Fields as a Defendant in that action.\n4. North Carolina Farm Bureau Mutual Insurance Company\u2019s refusal to defend Eddie Darrell Fields as the Defendant in case number 85 CVS 5891 was unjustified, and was in bad faith regardless of any mistaken belief that the claim was outside their policy coverage.\n5. North Carolina Farm Bureau Mutual Insurance Company had a duty to try and settle a claim against its insureds in case number 85 CVS 5891; it breached that duty when they refused to accept an offer of settlement by the Plaintiffs in case number 85 CVS 5891 for policy limits.\n6. North Carolina Farm Bureau Mutual Insurance Company\u2019s refusal to accept the Plaintiffs offer of settlement in case number 85 CVS 5891 for policy limits constituted a breach of the implied covenant of good faith and fair dealing.\n7. The Plaintiffs shall recover of the Defendant North Carolina Farm Bureau Mutual Insurance Company the sum of $51,000 irregardless of policy limits.\nAll claims against State Farm were dismissed, and in a separate order, post-trial motions to set aside the verdict, for judgment notwithstanding the verdict, and for a new trial were denied. Defendant Farm Bureau appealed.\nWilliam Z. Wood for plaintiff, appellee.\nPetree Stockton & Robinson, by Robert J. Lawing and Richard J. Keshian, for defendant, appellant.\nHutchins, Tyndall, Doughton & Moore, by Richard Tyndall and Laurie H. Woltz, for defendant, appellee."
  },
  "file_name": "0320-01",
  "first_page_order": 350,
  "last_page_order": 356
}
