{ "id": 796124, "name": "INTEGON INDEMNITY CORPORATION v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY", "name_abbreviation": "Integon Indemnity Corp. v. Universal Underwriters Insurance", "decision_date": "1995-11-03", "docket_number": "No. 516PA94", "first_page": "166", "last_page": "172", "citations": [ { "type": "official", "cite": "342 N.C. 166" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "447 S.E.2d 512", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "opinion_index": -1 }, { "cite": "116 N.C. App. 279", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523502 ], "year": 1994, "opinion_index": -1, "case_paths": [ "/nc-app/116/0279-01" ] }, { "cite": "19 ALR4th 107", "category": "reporters:specialty", "reporter": "A.L.R. 4th", "opinion_index": -1 }, { "cite": "93 ALR2d 1047", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": -1 }, { "cite": "21 ALR2d 611", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": -1 }, { "cite": "332 N.C. 333", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2506934 ], "opinion_index": -1, "case_paths": [ "/nc/332/0333-01" ] }, { "cite": "152 S.E.2d 436", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1967, "pin_cites": [ { "page": "444-45" } ], "opinion_index": 0 }, { "cite": "269 N.C. 341", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8563605 ], "year": 1967, "pin_cites": [ { "page": "352" } ], "opinion_index": 0, "case_paths": [ "/nc/269/0341-01" ] }, { "cite": "420 S.E.2d 155", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 7, "year": 1992, "pin_cites": [ { "page": "158" }, { "page": "158" }, { "page": "156" }, { "page": "158" }, { "page": "157-58" }, { "page": "157", "parenthetical": "emphasis added" }, { "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "238 S.E.2d 597", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "pin_cites": [ { "page": "604" } ], "opinion_index": 0 }, { "cite": "293 N.C. 431", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565135 ], "year": 1977, "pin_cites": [ { "page": "441" } ], "opinion_index": 0, "case_paths": [ "/nc/293/0431-01" ] }, { "cite": "332 N.C. 333", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2506934 ], "weight": 3, "pin_cites": [ { "page": "338" }, { "page": "338" }, { "page": "334" } ], "opinion_index": 0, "case_paths": [ "/nc/332/0333-01" ] } ], "analysis": { "cardinality": 496, "char_count": 15095, "ocr_confidence": 0.764, "pagerank": { "raw": 2.0292999374750206e-07, "percentile": 0.7463744025230815 }, "sha256": "0ded29e98da5734e88c65ed3799a588b99570db562e43e23d7e2481643f02cdf", "simhash": "1:e959c6c40792c7fe", "word_count": 2477 }, "last_updated": "2023-07-14T19:36:26.105751+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Justice ORR did not participate in the consideration or decision of this case." ], "parties": [ "INTEGON INDEMNITY CORPORATION v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY" ], "opinions": [ { "text": "PARKER, Justice.\nPlaintiff Integon Indemnity Corporation (\u201cIntegon\u201d) filed a declaratory judgment action seeking a determination of the rights of the parties with respect to policy coverage applicable to an automobile accident on 5 March 1989. The case was heard in Superior Court, Buncombe County, and judgment was entered on 1 October 1992. The trial court made inter alia the following findings of fact: On 5 March 1989 Meeker Lincoln-Mercury (\u201cMeeker\u201d) owned a 1988 Peugeot automobile. On 5 March 1989 while the Meeker Peugeot was being operated by Lisa Gaddy, the vehicle overturned causing injury to Brandy Dryman. Meeker had loaned the Peugeot to Hope and Allen Bridges, parents of Lisa Gaddy. Lisa Gaddy had the permission of her parents to be operating the automobile at the tim\u00e9 of the accident on 5 March 1989. At the time of the accident, Meeker was insured under a policy of insurance issued by defendant Universal Underwriters Insurance Company (\u201cUniversal\u201d). The parties stipulated and the court further found that at the time of the accident, Integon provided automobile liability coverage to Hope and Allen Bridges with liability limits in the minimum amount required by the North Carolina General Statutes and that a third insurer, Atlantic Casualty Insurance Company (\u201cAtlantic\u201d), provided a policy of automobile liability insurance covering Lisa Gaddy with liability limits in the minimum amount required by the North Carolina General Statutes.\nBased on the foregoing findings of fact, the trial court concluded that at the time of the accident Lisa Gaddy, Allen Bridges, and Hope Bridges were insureds under both the Integon and Atlantic automobile liability policies, each policy with liability limits in the minimum limits required by the North Carolina General Statutes; Lisa Gaddy was using the Peugeot within the scope of permission granted by Meeker; Lisa Gaddy was not an insured under the Universal policy because she was not \u201crequired by law to be an INSURED\u201d under the Universal policy by virtue of the coverage provided by Integon and Atlantic, which satisfied N.C.G.S. \u00a7 20-279.21(b)(2); by the terms of Universal\u2019s policy, Universal had no obligation to indemnify or defend Lisa Gaddy or her parents, Allen and Hope Bridges, in connection with the accident on 5 March 1989; and Integon is entitled to recover nothing from Universal.\nOn Integon\u2019s appeal to the Court of Appeals, that court reversed the trial court\u2019s judgment and remanded the cause for entry of judgment providing for defendant Universal to pay its pro rata share of the minimum limits required by the motor vehicle laws of North Carolina. On this issue we affirm the decision of the Court of Appeals.\nNorth Carolina\u2019s Motor Vehicle Safety and Financial Responsibility Act requires each automobile owner to carry a minimum amount of liability insurance providing coverage for the named insured as well as any other person using the automobile with the express or implied permission of the named insured. N.C.G.S. \u00a7 20-279.21(b)(2) (1993). Provisions of the Motor Vehicle Safety and Financial Responsibility Act are written into every automobile policy as a matter of law. Nationwide Mut. Ins. Co. v. Chantos, 293 N.C. 431, 441, 238 S.E.2d 597, 604 (1977). In accordance with this statutory requirement of coverage for permissive users, the insurance policy Universal issued to Meeker extended liability coverage to:\nWith respect to the Auto Hazard:\n1. You;\n2. Any of Your partners, paid employees, directors, stockholders, executive officers, a member of their household or a member of Your household, while using an Auto covered by this Coverage Part, or when legally responsible for its use. The actual use of the Auto must be by You or within the scope of Your permission;\n3. Any other person or organization required by law to be an Insured while using an Auto covered by this Coverage Part within the scope of Your permission.\nUnder section 3 set out above, as an operator of one of Meeker\u2019s automobiles within the scope of its permission, Lisa Gaddy is an insured under the Universal policy. United Services Auto. Assn. v. Universal Underwriters Ins. Co., 332 N.C. 333, 338, 420 S.E.2d 155, 158 (1992). Thus Universal is responsible for providing liability coverage for Lisa Gaddy unless its policy contains language limiting or excluding coverage.\nAlthough N.C.G.S. \u00a7 20-279.21(b)(2) requires each automobile owner to carry a minimum amount of liability insurance, we have previously held that this statute is satisfied if the terms of the policy exclude coverage in the event the driver of a vehicle is covered under some other policy for the minimum amount of liability coverage required by law. Allstate Ins. Co. v. Shelby Mut. Ins. Co., 269 N.C. 341, 352, 152 S.E.2d 436, 444-45 (1967). Defendant Universal argues that the following provisions found in its policy expressly deny any coverage to a driver \u201crequired by law\u201d to be an insured, when the driver has other policy coverage sufficient to satisfy N.C.G.S. \u00a7 20-279.21(b)(2):\nUnicover Coverage Part 500\nGarage\nThe most we will pay \u2014 Regardless of the number of Insureds or Autos insured by this Coverage Part, persons or organizations who sustain Injury, claims made or suits brought, the most We will pay is:\n1. With respect to Garage Operations and Auto Hazard, the limit shown in the declarations for any one Occurrence.\nWith respect to persons or organizations required by law to be an Insured, the most We will pay, in the absence of any other applicable insurance, is the minimum limits required by the Motor Vehicle Laws of North Carolina. When there is other applicable insurance, We will pay only Our pro rata share of such minimum limits.\nOther Insurance' \u2014 The insurance afforded by this Coverage Part is primary, except:\n(2) We will pay only Our pro rata share of the minimum limits required by the Motor Vehicle Laws of North Carolina when:\n(a) a person or organization required by law to be an Insured is using an Auto owned by You and insured under the Auto Hazard ....\nDefendant Universal argues that because Lisa Gaddy has insurance with two other insurance companies, Integon and Atlantic, which meets the minimum requirements of the Motor Vehicle Safety and Financial Responsibility Act, she is not an individual \u201crequired by law\u201d to be an insured and the terms of the policy do not extend pro rata coverage to this claim. We have previously held that an individual operating an automobile with the owner\u2019s permission is an individual \u201crequired by law\u201d to be an insured as that phrase is used in Universal\u2019s policy. United Services, 332 N.C. at 338, 420 S.E.2d at 158. We disagree with Universal\u2019s argument that its policy precludes coverage to a driver \u201crequired by law\u201d to be an insured when the driver already has sufficient liability coverage. The policy provides that Universal will pay its pro rata share of the minimum limits required by law. The \u201cmost we will pay\u201d clause in the Universal policy states that the most the company will pay for an individual required by law to be an insured is \u201cthe minimum limits required by the Motor Vehicle Laws of North Carolina\u201d and that it will only pay this amount if the driver has no other insurance. In the event the driver does have other applicable insurance, the policy states that it will pay a pro rata share of such minimum limits. In this case Lisa Gaddy does have other applicable insurance; and under the terms of the policy, Universal is responsible for a pro rata share of the minimum limits.\nSimilarly, the \u201cother insurance\u201d provision of Universal\u2019s policy sets out that the insurance is primary except that it will only pay the \u201cpro rata share of the minimum limits required by the Motor Vehicle Laws of North Carolina\u201d for an individual required by law to be an insured. Lisa Gaddy is an individual required by law to be an insured, and Universal is responsible for paying a pro rata share of the minimum requirements under the Motor Vehicle Safety and Financial Responsibility Act.\nDefendant Universal argues that its position that Lisa Gaddy is not an insured under its policy is supported by United Services, a case with facts and insurance policies similar to those at issue here. In United Services the plaintiff insurance company provided coverage to the driver of a truck involved in a collision. At the time of the collision, the insured driver was operating the truck with the permission of the owner of the vehicle, Warden Motors, Inc. (\u201cWarden\u201d). Warden carried a garage owner\u2019s liability policy with defendant Universal Underwriters Insurance Company. United Services, 332 N.C. at 334, 420 S.E.2d at 156.\nIn United Services we held that Universal was required by law to insure persons who were operating the truck with the owner\u2019s permission. Id. at 338, 420 S.E.2d at 158. However, we also held that Universal had limited its liability under its \u201cmost we will pay\u201d and \u201cother insurance\u201d clauses in contracting to pay only the amount, or amount in excess of any other insurance available, needed to comply with the Motor Vehicle Safety and Financial Responsibility Act. Id. at 336-37, 420 S.E.2d at 157-58.\nThe definition of \u201cinsured\u201d present in the Universal policy before the Court in United Services is almost identical to the definition found in the policy at issue in this case. Each policy contains an identical provision extending coverage to any person \u201crequired by law\u201d to be an insured. There are, however, significant differences in the Universal policy analyzed by the Court in United Services and the Universal policy currently before the Court. In United Services the subject Universal policy provided for the following limitations:\nRegardless of the number of Insureds or Autos insured by this Coverage Part, . . . the most We will pay is:\n1. With respect to Garage Operations and Auto Hazard, the limit shown in the declarations for any one Occurrence.\nThe portion of the limit applicable to persons or organizations required by law to be an Insured is only the amount (or amount in excess of any other insurance available to them) needed, to comply with the minimum limits provision of such law in the jurisdiction where the Occurrence takes place.\nId. at 336, 420 S.E.2d at 157 (emphasis added). The \u201cother insurance\u201d provision stated:\nThe insurance afforded by this Coverage Part is primary, except it is excess:\n2. for any person or organization who becomes an Insured under this Coverage Part as required by law.\nId. (emphasis added).\nThe Universal policy at issue in United Services clearly limited liability coverage for individuals \u201crequired by law\u201d to be an insured to \u201conly the amount (or amount in excess of any other insurance available to them) needed to comply with the minimum limits\u201d of any applicable law. Similarly, the policy provided that it was excess for any person who becomes an insured as required by law. No such limitations are present in the Universal policy at issue in this case.\nThe Universal policy in the instant case provides that if there is other applicable insurance, Universal will pay its pro rata share of the minimum limits required by law. Since there is other applicable insurance, we conclude that by the terms of the policy, Universal has agreed to pay a pro rata share of the minimum limits required by the motor vehicle laws of North Carolina.\nAn additional issue was before the Court regarding which of the insurance companies is primarily responsible for the defense of Lisa Gaddy. Defendant Universal argues that if Lisa Gaddy is covered under its policy, there is no provision in the policy obligating Universal to pay defense costs. Plaintiff Integon concedes that defense costs should not be prorated and states that each carrier has a separate duty to defend its own insured. Accordingly, on.this issue the Court of Appeals\u2019 opinion is reversed.\nAFFIRMED IN PART, REVERSED IN PART.\nJustice ORR did not participate in the consideration or decision of this case.", "type": "majority", "author": "PARKER, Justice." } ], "attorneys": [ "Blue, Fellerath, Cloninger & Barbour, P.A., by Frederick S. Barbour, for plaintiff-appellee.", "Petree Stockton, L.L.P., by James H. Kelly, Jr. and Susan Fioldsclaw Boyles, for defendant-appellant." ], "corrections": "", "head_matter": "INTEGON INDEMNITY CORPORATION v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY\nNo. 516PA94\n(Filed 3 November 1995)\n1. Insurance \u00a7 549 (NCI4th)\u2014 loaner vehicle \u2014 garage liability \u2014 driver\u2019s policy \u2014 pro rata share\nIn a declaratory judgment action seeking a determination of the rights of the parties with respect to policy coverage applicable to an automobile accident, where Universal insured Meeker Lincoln-Mercury, which loaned the automobile involved in the accident to Hope and Allen Bridges, insured by Integon, who gave permission to use the vehicle to their daughter, Lisa Gaddy, who was insured by Atlantic Casualty, Universal is required to pay a pro rata share of the minimum limits required by the motor vehicle laws of North Carolina because the Universal policy provides that if there is other applicable insurance, Universal will pay its pro rata share of the minimum limits required by law and there is other applicable insurance here through Lisa Gaddy. Under the Universal policy, Lisa Gaddy is an insured as an operator of one of Meeker\u2019s automobiles within the scope of its permission. Although Universal argues that, because Lisa Gaddy has insurance with two other insurance companies which meet the minimum requirements of the Motor Vehicle Safety and Financial Responsibility Act, she is not an individual \u201crequired by law\u201d to be an insured and the terms of the policy do not extend pro rata coverage to this claim, Lisa Gaddy does have other applicable insurance and under the terms of the policy Universal is responsible for a pro rata share of the minimum limits. The policy in United Services Auto. Assn. v. Universal Underwriters Ins. Co., 332 N.C. 333, which involved similar facts and policies, contained limitations not present in the Universal policy at issue here.\nAm Jur 2d, Automobile Insurance \u00a7\u00a7 220, 246, 432.\nApportionment of losses among automobile liability insurers under policies containing pro rata clauses. 21 ALR2d 611.\nLiability insurance of garages, motor vehicle repair shops and sales agencies, and the like. 93 ALR2d 1047.\n2. Insurance \u00a7 549 (NCI4th)\u2014 garage liability policy\u2014 driver\u2019s policy \u2014 defense costs\nIn an action arising from an automobile accident involving a vehicle loaned by an auto dealer, plaintiff Integon conceded that defense costs should not be prorated and the Court of Appeals\u2019 opinion on this issue was reversed.\nAm Jur 2d, Automobile Insurance \u00a7 432.\nAllocation of defense costs between primary and excess insurance carriers. 19 ALR4th 107.\nJustice Orr did not participate in the consideration or decision of this case.\nOn discretionary review pursuant to N.C.G.S. \u00a7 7A-31 of a unanimous decision of the Court of Appeals, 116 N.C. App. 279, 447 S.E.2d 512 (1994), reversing the judgment entered in favor of defendant by Caviness, J., in the Superior Court, Buncombe County, on 1 October 1992. Heard in the Supreme Court 12 September 1995.\nBlue, Fellerath, Cloninger & Barbour, P.A., by Frederick S. Barbour, for plaintiff-appellee.\nPetree Stockton, L.L.P., by James H. Kelly, Jr. and Susan Fioldsclaw Boyles, for defendant-appellant." }, "file_name": "0166-01", "first_page_order": 198, "last_page_order": 204 }