{ "id": 1511376, "name": "LIBERTY MUTUAL INSURANCE CO. v. JUDY BASS PENNINGTON and RICK PENNINGTON", "name_abbreviation": "Liberty Mutual Insurance v. Pennington", "decision_date": "2002-12-20", "docket_number": "No. 185PA01", "first_page": "571", "last_page": "582", "citations": [ { "type": "official", "cite": "356 N.C. 571" } ], "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": "541 S.E.2d 503", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "opinion_index": -1 }, { "cite": "141 N.C. App. 495", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9441707 ], "year": 2000, "opinion_index": -1, "case_paths": [ "/nc-app/141/0495-01" ] }, { "cite": "265 S.E.2d 467", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "473" } ], "opinion_index": 0 }, { "cite": "46 N.C. App. 427", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8551203 ], "year": 1980, "pin_cites": [ { "page": "437" } ], "opinion_index": 0, "case_paths": [ "/nc-app/46/0427-01" ] }, { "cite": "530 S.E.2d 829", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "pin_cites": [ { "page": "837" } ], "opinion_index": 0 }, { "cite": "352 N.C. 77", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 684915 ], "year": 2000, "pin_cites": [ { "page": "87" } ], "opinion_index": 0, "case_paths": [ "/nc/352/0077-01" ] }, { "cite": "279 S.E.2d 769", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1981, "pin_cites": [ { "page": "776" }, { "page": "776" }, { "page": "775-77" } ], "opinion_index": 0 }, { "cite": "303 N.C. 387", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573853 ], "weight": 2, "year": 1981, "pin_cites": [ { "page": "399" }, { "page": "398" } ], "opinion_index": 0, "case_paths": [ "/nc/303/0387-01" ] }, { "cite": "381 S.E.2d 698", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1989, "pin_cites": [ { "page": "702" }, { "page": "702" } ], "opinion_index": 0 }, { "cite": "325 N.C. 202", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2492024 ], "weight": 2, "year": 1989, "pin_cites": [ { "page": "209" } ], "opinion_index": 0, "case_paths": [ "/nc/325/0202-01" ] }, { "cite": "398 S.E.2d 445", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1990, "pin_cites": [ { "page": "452" }, { "page": "452" } ], "opinion_index": 0 }, { "cite": "327 N.C. 526", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2493040 ], "weight": 2, "year": 1990, "pin_cites": [ { "page": "539" }, { "page": "539" } ], "opinion_index": 0, "case_paths": [ "/nc/327/0526-01" ] }, { "cite": "414 S.E.2d 339", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "342" } ], "opinion_index": 0 }, { "cite": "331 N.C. 57", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2500046 ], "year": 1992, "pin_cites": [ { "page": "63" } ], "opinion_index": 0, "case_paths": [ "/nc/331/0057-01" ] }, { "cite": "289 S.E.2d 363", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "pin_cites": [ { "page": "366" } ], "opinion_index": 0 }, { "cite": "305 N.C. 366", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8569908 ], "year": 1982, "pin_cites": [ { "page": "369-70" } ], "opinion_index": 0, "case_paths": [ "/nc/305/0366-01" ] }, { "cite": "186 S.E.2d 897", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1972, "pin_cites": [ { "page": "901" } ], "opinion_index": 0 }, { "cite": "280 N.C. 513", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8572831 ], "year": 1972, "pin_cites": [ { "page": "518" } ], "opinion_index": 0, "case_paths": [ "/nc/280/0513-01" ] }, { "cite": "513 S.E.2d 320", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "325" } ], "opinion_index": 0 }, { "cite": "350 N.C. 214", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 132102 ], "year": 1999, "pin_cites": [ { "page": "220" } ], "opinion_index": 0, "case_paths": [ "/nc/350/0214-01" ] }, { "cite": "565 S.E.2d 140", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 2002, "pin_cites": [ { "page": "146" }, { "page": "146" }, { "page": "146" } ], "opinion_index": 0 }, { "cite": "355 N.C. 672", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 220147 ], "weight": 3, "year": 2002, "pin_cites": [ { "page": "681" }, { "page": "681" }, { "page": "681" } ], "opinion_index": 0, "case_paths": [ "/nc/355/0672-01" ] }, { "cite": "548 S.E.2d 704", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2001, "pin_cites": [ { "page": "707" }, { "page": "707" } ], "opinion_index": 0 }, { "cite": "353 N.C. 647", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 135724 ], "weight": 2, "year": 2001, "pin_cites": [ { "page": "650" }, { "page": "651" } ], "opinion_index": 0, "case_paths": [ "/nc/353/0647-01" ] }, { "cite": "353 S.E.2d 406", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "opinion_index": 0 }, { "cite": "319 N.C. 224", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4748910, 4741584, 4744945, 4742929, 4747543 ], "year": 1987, "opinion_index": 0, "case_paths": [ "/nc/319/0224-04", "/nc/319/0224-02", "/nc/319/0224-01", "/nc/319/0224-03", "/nc/319/0224-05" ] }, { "cite": "350 S.E.2d 175", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "177", "parenthetical": "holding that UIM carrier discharged as a matter of law, given derivative nature of carrier's liability, where plaintiff-insured executed release of claims against tortfeasor" } ], "opinion_index": 0 }, { "cite": "83 N.C. App. 428", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358716 ], "year": 1986, "pin_cites": [ { "page": "430", "parenthetical": "holding that UIM carrier discharged as a matter of law, given derivative nature of carrier's liability, where plaintiff-insured executed release of claims against tortfeasor" } ], "opinion_index": 0, "case_paths": [ "/nc-app/83/0428-01" ] }, { "cite": "378 S.E.2d 21", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "pin_cites": [ { "page": "25" } ], "opinion_index": 0 }, { "cite": "324 N.C. 289", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2487753 ], "year": 1989, "pin_cites": [ { "page": "294" } ], "opinion_index": 0, "case_paths": [ "/nc/324/0289-01" ] }, { "cite": "204 S.E.2d 829", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1974, "pin_cites": [ { "page": "834", "parenthetical": "emphasis added" }, { "page": "834" } ], "opinion_index": 0 }, { "cite": "285 N.C. 313", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8564075 ], "weight": 2, "year": 1974, "pin_cites": [ { "page": "319" } ], "opinion_index": 0, "case_paths": [ "/nc/285/0313-01" ] }, { "cite": "209 S.E.2d 754", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1974, "pin_cites": [ { "page": "756", "parenthetical": "quoting 7 Strong's North Carolina Index 2d Statutes \u00a7 5 (1968)" } ], "opinion_index": 0 }, { "cite": "286 N.C. 148", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8563921 ], "year": 1974, "pin_cites": [ { "page": "152", "parenthetical": "quoting 7 Strong's North Carolina Index 2d Statutes \u00a7 5 (1968)" } ], "opinion_index": 0, "case_paths": [ "/nc/286/0148-01" ] }, { "cite": "418 S.E.2d 232", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "235" } ], "opinion_index": 0 }, { "cite": "332 N.C. 141", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2508082 ], "year": 1992, "pin_cites": [ { "page": "144" } ], "opinion_index": 0, "case_paths": [ "/nc/332/0141-01" ] }, { "cite": "407 S.E.2d 222", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "227" } ], "opinion_index": 0 }, { "cite": "329 N.C. 330", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2553288 ], "year": 1991, "pin_cites": [ { "page": "338" } ], "opinion_index": 0, "case_paths": [ "/nc/329/0330-01" ] }, { "cite": "376 S.E.2d 761", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1989, "pin_cites": [ { "page": "764" }, { "page": "764" } ], "opinion_index": 0 }, { "cite": "324 N.C. 221", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2485985 ], "weight": 2, "year": 1989, "pin_cites": [ { "page": "225" }, { "page": "225" } ], "opinion_index": 0, "case_paths": [ "/nc/324/0221-01" ] }, { "cite": "382 S.E.2d 759", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1989, "pin_cites": [ { "page": "763" }, { "page": "763" } ], "opinion_index": 0 }, { "cite": "325 N.C. 259", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2492574 ], "weight": 2, "year": 1989, "pin_cites": [ { "page": "265" }, { "page": "265" } ], "opinion_index": 0, "case_paths": [ "/nc/325/0259-01" ] } ], "analysis": { "cardinality": 1089, "char_count": 27792, "ocr_confidence": 0.736, "pagerank": { "raw": 1.096508466418067e-06, "percentile": 0.985454750450702 }, "sha256": "70ffb9161031d6918d73efa9bc8deb279ea25d24d25cea6de48fdeb11bb8dcb6", "simhash": "1:ab499436063f207a", "word_count": 4486 }, "last_updated": "2023-07-14T16:17:54.672071+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "LIBERTY MUTUAL INSURANCE CO. v. JUDY BASS PENNINGTON and RICK PENNINGTON" ], "opinions": [ { "text": "BUTTERFIELD, Justice.\nPlaintiff Liberty Mutual Insurance Company instituted this action for declaratory judgment seeking an affirmation that the insurance policy issued to defendants Judy and Rick Pennington afforded defendants no underinsured motorist (UIM) coverage for injuries arising out of an automobile accident involving Judy Pennington and an underinsured motorist. The underlying facts are as follows: Judy Pennington and her daughter, Christy, were injured on 9 December 1993, when a truck driven by Clee Earp and owned by Blackburn Logging Company caused Judy\u2019s vehicle to collide with other vehicles. At the time of the accident, defendants were insured under an automobile liability policy issued by plaintiff, which provided UIM coverage pursuant to the provisions of N.C.G.S. \u00a7 20-279.21(b)(4).\nOn 5 June 1996, the Penningtons brought an action against Earp and Blackburn Logging (collectively, the tortfeasors) to recover damages for personal injuries sustained in the 9 December 1993 accident. The case underwent court-ordered mediation on 10 December 1997, at which time the Penningtons learned for the first time that $25,000/$50,000 were the limits of liability on the policy covering Blackburn Logging. The parties thereafter reached a tentative mediated settlement agreement wherein the tortfeasors\u2019 insurance provider agreed to tender its policy limits. However, immediately following the mediation, the Penningtons notified Liberty Mutual that they intended to seek coverage under their $50,000/$100,000 UIM policy because the liability limits under the tortfeasors\u2019 policy were insufficient to fully compensate the Penningtons for their damages. Prior to that time, the Penningtons had not informed Liberty Mutual of their personal injury action against the tortfeasors.\nOn 22 December 1997, the Penningtons\u2019 attorney sent written notice of the proposed settlement agreement to Liberty Mutual. Liberty Mutual chose not to review the settlement documents or to advance $25,000 to the Penningtons in order to preserve its subrogation rights under N.C.G.S. \u00a7 20-279.21(b)(4). Instead, Liberty Mutual sought to avoid the Penningtons\u2019 UIM claim on the ground that notice thereof was untimely.\nPlaintiff Liberty Mutual filed this action on 29 May 1998 requesting a judicial declaration that it was not required to provide UIM coverage to defendants because of their failure to comply with the notice provisions of the policy and to notify plaintiff of the UIM claim prior to the expiration of the three-year statute of limitations period set forth in N.C.G.S. \u00a7 1-52. Plaintiff and defendants filed cross-motions for summary judgment, and by order dated 24 August 1999, the trial court entered summary judgment for plaintiff. Specifically, the trial court concluded \u201cthat there is no genuine issue as to any material fact, which was specifically stipulated to by the parties during the hearing\u201d and \u201cthat plaintiff... is entitled to judgment as a matter of law, declaring that its policy affords no underinsured motorist coverage for the [9 December 1993] accident.\u201d\nDefendants appealed to the Court of Appeals, which unanimously reversed the entry of summary judgment by the trial court. The Court of Appeals held that N.C.G.S. \u00a7 20-279.21(b)(4) did not require an insured to notify her carrier of a claim for UIM coverage within the three-year statute of limitations applicable to the tortfeasor. The Court of Appeals further concluded that there remained issues of fact as to whether plaintiff was entitled to deny UIM coverage to defendants based on their failure to adhere to the notification provisions contained in the policy. Plaintiff then petitioned this Court for writ of certiorari to review the decision of the Court of Appeals, which we allowed on 3 May 2001.\nI.\nBefore proceeding to plaintiff\u2019s arguments, we think it useful to outline some predominant features of the North Carolina Motor Vehicle Safety and Financial Responsibility Act (commonly referred to as the Financial Responsibility Act), of which N.C.G.S. \u00a7 20-279.21(b)(4) is a part. As this Court recognized in Sutton v. Aetna Cas. & Sur. Co., 325 N.C. 259, 265, 382 S.E.2d 759, 763 (1989), \u201c[t]he avowed purpose of the Financial Responsibility Act ... is to compensate the innocent victims of financially irresponsible motorists.\u201d The Act is remedial in nature and is \u201cto be liberally construed so that the beneficial purpose intended by its enactment may be accomplished.\u201d Id. The purpose of the Act, we have said, \u201cis best served when [every provision of the Act] is interpreted to provide the innocent victim with the fullest possible protection.\u201d Proctor v. N.C. Farm Bureau Mut. Ins. Co., 324 N.C. 221, 225, 376 S.E.2d 761, 764 (1989).\nPlaintiff contends that, pursuant to N.C.G.S. \u00a7 20-279.21(b)(4), defendants had an obligation to notify plaintiff of their claim for UIM coverage within the three-year statute of limitations prescribed for personal injury actions, N.C.G.S. \u00a7 1-52(16) (1993) (amended 1996). Failure to do so, plaintiff argues, precluded defendants from recovering UIM benefits. The notification provision of N.C.G.S. \u00a7 20-279.21(b)(4) reads, in pertinent part, as follows:\nA party injured by the operation of an underinsured highway vehicle who institutes a suit for the recovery of moneys for those injuries and in such an amount that, if recovered, would support a claim under underinsured motorist coverage shall give notice of the initiation of the suit to the underinsured motorist insurer as well as to the insurer providing primary liability coverage upon the underinsured highway vehicle. Upon receipt of notice, the underinsured motorist insurer shall have the right to appear in defense of the claim without being named as a party therein, and without being named as a party may participate in the suit as fully as if it were a party.\nN.C.G.S. \u00a7 20-279.21(b)(4), para. 4 (1993) (amended 1997) (emphasis added). The issue of whether notice of a UIM claim must be given within the statute of limitations governing the underlying tort action is one not previously considered by this Court. Resolution of this issue depends upon our construction of the notice requirement of N.C.G.S. \u00a7 20-279.21(b)(4). We set about this task pursuant to well-defined tenets of statutory interpretation.\nThe primary goal of statutory construction is to effectuate the purpose of the legislature in enacting the statute. Woodson v. Rowland, 329 N.C. 330, 338, 407 S.E.2d 222, 227 (1991); Sutton, 325 N.C. at 265, 382 S.E.2d at 763. \u201cThe legislative purpose of a statute is first ascertained by examining the statute\u2019s plain language.\u201d Correll v. Division of Soc. Servs., 332 N.C. 141, 144, 418 S.E.2d 232, 235 (1992). \u201c \u2018Where the language of a statute is clear and unambiguous, there is no room for judicial construction[,] arid the courts must give [the statute] its plain and definite meaning, and are without power to interpolate, or superimpose, provisions and limitations not contained therein.\u2019 \u201d State v. Camp, 286 N.C. 148, 152, 209 S.E.2d 754, 756 (1974) (quoting 7 Strong\u2019s North Carolina Index 2d Statutes \u00a7 5 (1968)).\nWith these principles in mind, we conclude that under N.C.G.S. \u00a7 20-279.21(b)(4), there is no requirement that the UIM carrier be notified of a claim within the limitations period applicable to the underlying tort action. The language of the statute is clear, and nothing therein suggests that the notification requirement is subject to a statute of limitations. To the contrary, the statute merely directs the insured to \u201cgive notice o/the initiation of the suit to the underinsured motorist insurer.\u201d N.C.G.S. \u00a7 20-279.21(b)(4), para. 4 (emphasis added). The statute does not prescribe the type of notice, the content of the notice, or the method by which it is to be executed. The statute is similarly devoid of any particulars as to the time within 'which notice to the insurer must be provided. Given the lack of direction and specificity of N.C.G.S. \u00a7 20-279.21(b)(4) regarding the notification requirement, we cannot conclude that the failure to provide such notice within the statute of limitations applicable to the underlying tort action operates to bar recovery of UIM benefits.\nPlaintiff notes, nonetheless, that under N.C.G.S. \u00a7 20-279.21(b)(4), the UIM carrier shall, upon receiving notice, have \u201cthe right to appear in defense of the claim\u201d and to \u201cparticipate in the suit as fully as if it were a party.\u201d Id. Plaintiff argues that \u201cfull\u201d participation is impossible without prompt notice of the suit; therefore, the legislature must have intended to require that notice be given within the limitations period for the underlying action. Again, we do not believe that such a construction follows from a plain reading of N.C.G.S. \u00a7 20-279.21(b)(4). The statute simply affords the insurer the right to choose to fully participate in the underlying action at such time as the insurer receives notice of the suit. Contrary to plaintiff\u2019s contention, we find nothing in the aforementioned language to suggest that the insured is obligated to notify the UIM carrier of a claim within the statute of limitations applicable to the underlying action.\nA comparison of the language of N.C.G.S. \u00a7 20-279.21(b)(4) to that of N.C.G.S. \u00a7 20-279.21(b)(3), which applies to uninsured motorist (UM) coverage, lends support to the construction we adopt here. Under N.C.G.S. \u00a7 20-279.21(b)(3), all liability insurance policies are subject to the following:\nA provision that the insurer shall be bound by a final judgment taken by the insured against an uninsured motorist if the insurer has been served with copy of summons, complaint or other process in the action against the uninsured motorist by registered or certified mail, return receipt requested, or in any manner provided by law .... The insurer, upon being served as herein provided, shall be a party to the action between the insured and the uninsured motorist though not named in the caption of the pleadings and may defend the suit in the name of the uninsured motorist or in its own name. The insurer, upon being served with copy of summons, complaint or other pleading, shall have the time allowed by statute in which to answer, demur or otherwise plead (whether the pleading is verified or not) to the summons, complaint or other process served upon it. The consent of the insurer shall not be required for the initiation of suit by the insured against the uninsured motorist: Provided, however, no action shall be initiated by the insured until 60 days following the posting of notice to the insurer at the address shown on the policy or after personal delivery of the notice to the insurer or its agent setting forth the belief of the insured that the prospective defendant or defendants are uninsured motorists.\nN.C.G.S. \u00a7 20-279.21(b)(3)(a) (emphasis added).\nThe differences between the two notification provisions is a clear indication that the legislature did not intend them to be given the same construction. N.C.G.S.\u00a7 20-279.21(b)(3) unequivocally requires that the UM carrier be served with a copy of the summons and complaint in order to be bound by a judgment against the uninsured motorist. Subsection (b)(3) further directs that upon service of process, the UM carrier shall become a party to the suit and shall have the time allowed by statute to file responsible pleadings. In sharp contrast, N.C.G.S. \u00a7 20-279.21(b)(4) does not specify the form, substance, or manner of the notice to be given the UIM carrier. Moreover, subsection (b)(4) does not mandate that the insurer become a party, but merely affords the insurer the option of full participation in the suit upon receipt of the notice. These key distinctions, we believe, illustrate the legislature\u2019s intent not to subject the notice provision of N.C.G.S. \u00a7 20-279.21(b)(4) to the applicable tort statute of limitations. Thus, we hold that defendants\u2019 claim for UIM benefits was not barred by the three-year statute of limitations set out in N.C.G.S. \u00a7 1-52(16).\nFurthermore, we believe that our interpretation of N.C.G.S. \u00a7 20-279.21(b)(4) is consistent with the remedial purpose of the Financial Responsibility Act and mirrors the characteristic differences between UM and UIM coverage. In the situation where a tortfeasor has no liability insurance coverage, the injured insured\u2019s UM carrier generally would be the only insurance provider exposed to liability for the insured\u2019s claim for damages. As such, it follows that the UM provider need be made a party to the suit and be served with a copy of the summons and complaint within the statute of limitations governing the underlying tort. The same is not true of the UIM carrier, which would become answerable for the insured\u2019s injuries only when the limits of the tortfeasor\u2019s liability coverage have been exhausted. See N.C.G.S. \u00a7 20-279.21(b)(4), para. 1 (\u201cUnderinsured motorist coverage is deemed to apply when, by reason of payment of judgment or settlement, all liability bonds or insurance policies providing coverage for bodily injury caused by the ownership, maintenance, or use of the underinsured highway vehicle have been exhausted.\u201d). In such a situation, the tortfeasor\u2019s liability carrier would be the party primarily responsible for defending the action brought by the injured insured. Thus, so long as the action against the tortfeasor is filed within the applicable statute of limitations, the insured\u2019s failure to notify her UIM carrier within the limitations period should not, without more, preclude her recovery of UIM benefits. This construction, we conclude, \u201cprovide[s] the innocent victim with the fullest possible protection.\u201d Proctor, 324 N.C. at 225, 376 S.E.2d at 764.\nII.\nPlaintiff argues, in the alternative, that defendants\u2019 claim for UIM benefits is barred for failure to comply with the three-year statute of limitations applicable to liabilities \u201ccreated by statute,\u201d N.C.G.S. \u00a7 1-52(2). This Court, however, rejected an analogous argument in Brown v. Lumbermens Mut. Cas. Co., 285 N.C. 313, 204 S.E.2d 829 (1974).\nIn Brown, the plaintiff\u2019s intestate died as a result of an accident involving an uninsured motorist. The plaintiff did not file a cause of action against the tortfeasor (the uninsured motorist) within the two-year statute of limitations for wrongful death actions. However, within three years of the accident, the plaintiff instituted an action against his intestate\u2019s UM carrier to recover damages for the wrongful death of the intestate. The plaintiff claimed that the action was timely filed because the three-year limitations period for contract actions controlled the UM claim. This Court disagreed, stating that the \u201c[p]laintiff\u2019s right to recover against his intestate\u2019s insurer under the uninsured motorist endorsement is derivative and conditional.\u201d Id. at 319, 204 S.E.2d at 834 (emphasis added). Further, we explained \u201cthat despite the contractual relation between plaintiff insured and defendant insurer, this action is actually one for the tort allegedly committed by the uninsured motorist.\u201d Id. Therefore, we held that the three-year contract statute of limitations did not apply and that the plaintiff\u2019s claim against the UM carrier was barred by the two-year statute of limitations applicable to wrongful-death actions.\nThe same reasoning applies to the case sub judice. This Court has recognized that, like the UM carrier, the UIM carrier\u2019s liability derives from that of the tortfeasor. Silvers v. Horace Mann Ins. Co., 324 N.C. 289, 294, 378 S.E.2d 21, 25 (1989); see also Buchanan v. Buchanan, 83 N.C. App. 428, 430, 350 S.E.2d 175, 177 (1986) (holding that UIM carrier discharged as a matter of law, given derivative nature of carrier\u2019s liability, where plaintiff-insured executed release of claims against tortfeasor), disc. rev. denied, 319 N.C. 224, 353 S.E.2d 406 (1987). Thus, although plaintiff\u2019s liability to defendants arises, in part, from N.C.G.S. \u00a7 20-279.21(b)(4), \u201cthis action is actually one for the tort allegedly committed by the [underinsured] motorist.\u201d Brown, 285 N.C. at 319, 204 S.E.2d at 834. Therefore, the limitations period for actions on statutory liabilities does not apply to defendants\u2019 claim for UIM coverage.\nIII.\nNext, we consider plaintiff\u2019s claim that defendants forfeited their right to recover UIM benefits based on their failure to adhere to the explicit notice requirements of the policy. In pertinent part, the policy provides that the UIM claimant must \u201c[promptly send [plaintiff] copies of the legal papers if a suit is brought.\u201d Further, the policy provides that \u201c[a] suit may not be brought by an insured until 60 days after that person notifies [plaintiff] of their [sic] belief that the prospective defendant is an uninsured[/underinsured] motorist.\u201d Plaintiff, therefore, contends that the trial court was correct in awarding summary judgment to plaintiff and that the Court of Appeals erred in reversing the ruling of the trial court.\nSummary judgment is an appropriate disposition only \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) (2001). The purpose of the rule is to avoid a formal trial where only questions of law remain and where an unmistakable weakness in a party\u2019s claim or defense exists. Dalton v. Camp, 353 N.C. 647, 650, 548 S.E.2d 704, 707 (2001). This Court has recognized that deciding what constitutes a bona fide issue of material fact is seldom an easy task. DeWitt v. Eveready Battery Co., 355 N.C. 672, 681, 565 S.E.2d 140, 146 (2002); Marcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C. 214, 220, 513 S.E.2d 320, 325 (1999). Nonetheless, we have instructed that \u201can issue is genuine if it is supported by substantial evidence,\u201d DeWitt, 355 N.C. at 681, 565 S.E.2d at 146, which is that amount of relevant evidence necessary to persuade a reasonable mind to accept a conclusion, id. Further, we have said that \u201c[a]n issue is material if the facts alleged would constitute a legal defense, or would affect the result of the action, or if its resolution would prevent the party against whom it is resolved from prevailing in the action.\u201d Koontz v. City of Winston-Salem, 280 N.C. 513, 518, 186 S.E.2d 897, 901 (1972).\nThe party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. DeWitt, 355 N.C. at 681, 565 S.E.2d at 146. If the movant successfully makes such a showing, the burden then shifts to the nonmovant to come forward with specific facts establishing the presence of a genuine factual dispute for trial. Lowe v. Bradford, 305 N.C. 366, 369-70, 289 S.E.2d 363, 366 (1982). \u201cWhen considering a motion for summary judgment, the trial judge must view the presented evidence in a light most favorable to the nonmoving party.\u201d Dalton, 353 N.C. at 651, 548 S.E.2d at 707. \u201cAll inferences of fact must be drawn against the movant and in favor of the nonmovant.\u201d Roumillat v. Simplistic. Enters., Inc., 331 N.C. 57, 63, 414 S.E.2d 339, 342 (1992). Moreover, the duty of the trial court in considering a motion for summary judgment is strictly confined to determining whether genuine issues of material fact exist and does not extend to resolving such issues. Alford v. Shaw, 327 N.C. 526, 539, 398 S.E.2d 445, 452 (1990); Ward v. Durham Life Ins. Co., 325 N.C. 202, 209 381 S.E.2d 698, 702 (1989). In short, the court\u2019s function at this juncture is to find factual issues, not to decide them. Alford, 327 N.C. at 539, 398 S.E.2d at 452; Ward, 325 N.C. at 209, 381 S.E.2d at 702.\nIn Great Am. Ins. Co. v. C.G. Tate Constr. Co., 303 N.C. 387, 399, 279 S.E.2d 769, 776 (1981), this Court articulated a three-pronged test for determining whether late notice to an insurer bars recovery:\nWhen faced with a claim that notice was not timely given, the trier of fact must first decide whether the notice was given as soon as practicable. If not, the trier of fact must decide whether the insured has shown that he acted in good faith, e.g., that he had no actual knowledge that a claim might be filed against him. If the good faith test is met the burden then shifts to the insurer to show that its ability to investigate and defend was materially prejudiced by the delay.\nIn the instant case, defendants concede that they did not notify plaintiff of the claim for UIM coverage as soon as practicable. Therefore, we proceed to the second prong of the Tale analysis \u2014 whether defendants\u2019 failure to timely notify plaintiff was in good faith.\nDefendants\u2019 evidence tended to show that they did not promptly notify plaintiff of the underlying tort action or their claim for UIM coverage because they simply did not know that the at-fault motorist was underinsured. Defendants presented evidence that they first became aware of their potential UIM claim during the mediation conference on 10 December 1997, when Blackburn Logging\u2019s liability insurer informed defendants for the first time that its liability limits were $25,000/$50,000. Realizing that these limits were inadequate to fully compensate them for their damages, defendants immediately notified plaintiff of their intent to seek coverage under the UIM provisions of defendants\u2019 liability policy.\nPlaintiff, on the other hand, contends that defendants can have no \u201cgood faith\u201d excuse for failing to ascertain the logging company\u2019s liability limits at the outset of the underlying tort litigation. Plaintiff notes that under N.C.G.S. \u00a7 1A-1, Rule 26(b)(2), defendants were entitled to discover, and should have discovered, the logging company\u2019s liability insurance policy. In view of this conflicting evidence, we find there to be a genuine issue of fact as to whether defendants acted in good faith in failing to promptly notify plaintiff of the UIM claim. Moreover, we note that \u201csummary judgment is rarely appropriate in actions ... in which the litigant\u2019s state of mind, motive, or subjective intent is an element of plaintiff\u2019s claim.\u201d Dobson v. Harris, 352 N.C. 77, 87, 530 S.E.2d 829, 837 (2000).\nWe turn next to the third prong of the Tate test \u2014 whether the delay materially prejudiced plaintiff\u2019s ability to investigate and defend the UIM claim. In determining whether the insurer has suffered material prejudice as a result of the delay, the following are among the relevant factors to be considered by the fact-finder:\n\u201cthe availability of witnesses to the accident; the ability to discover other information regarding the conditions of the locale where the accident occurred; any physical changes in the location of the accident during the period of delay; the existence of official reports concerning the occurrence; the preparation and preservation of demonstrative and illustrative evidence, such as the vehicles involved in the occurrence, or photographs and diagrams of the scene; the ability of experts to reconstruct the scene and the occurrence; and so on.\u201d\nGreat Am., 303 N.C. at 398, 279 S.E.2d at 776 (quoting Great Am. Ins. Co. v. C.G. Tate Constr. Co., 46 N.C. App. 427, 437, 265 S.E.2d 467, 473 (1980)).\nPlaintiff claims material prejudice to its ability to investigate and defend the UIM claim, in that it was precluded from participating in the extensive discovery conducted by the parties to the underlying tort action. Plaintiff asserts that the parties have already deposed all of the material witnesses, and if req\u00fcired to defend the suit, plaintiff will have to reconvene several of the witnesses\u2019 depositions at considerable expense. In addition, plaintiff argues that the untimely notice resulted in the insurer forfeiting its subrogation rights against the tortfeasors. Plaintiff contends that it was forced to relinquish such rights \u201cin order to preserve the coverage denial at issue here.\u201d We note, however, that the third prong of the Tate test is not designed to determine whether the insurer has suffered material prejudice in any and all respects. Rather, the prejudice with which Tate is concerned is that relative to the ability of the insurer to investigate and defend the claim in question. Id. at 397-400, 279 S.E.2d at 775-77. Therefore, the loss of plaintiff\u2019s subrogation rights is not relevant to this issue and is not properly a consideration in determining whether plaintiff may avoid liability based on the untimely notice.\nIn opposition to plaintiff\u2019s showing, defendants show that the underlying tort action has yet to go to trial and that plaintiff still has time to conduct additional discovery, to take additional depositions, or to redepose those witnesses who have already been deposed. Furthermore, there is nothing in the record to show that the tortfeasors had received inadequate legal representation prior to plaintiff\u2019s receiving notice of the suit. Likewise, nothing in the record suggests that witnesses have become unavailable or that material evidence has been made unattainable. Therefore, the record demonstrates neither the presence nor the absence of material prejudice as a matter of law. Accordingly, we hold that the issue of whether defendants are barred from recovering UIM benefits for failure to comply with the notice provisions of the policy is not yet ripe for summary judgment and that the trial court erroneously entered judgment in favor of plaintiff.\nFor the foregoing reasons, we hereby affirm the Court of Appeals\u2019 decision reversing the trial court\u2019s grant of summary judgment to plaintiff.\nAFFIRMED.\n. N.C.G.S. \u00a7 20-279.21 and N.C.G.S. \u00a7 1-52 have been amended since the accident giving rise to this action. However, for purposes of this opinion, all references will be to the 1993 versions of the statutes, which were in effect at the time of the 9 December 1993 accident.", "type": "majority", "author": "BUTTERFIELD, Justice." } ], "attorneys": [ "Cranfill, Sumner & Hartzog, L.L.P., by Edward C. LeCarpentier III, for plaintiff-appellant.", "Thompson, Smyth & Gioffi, L.L.P., by Theodore B. Smyth; and Pipkin, Knott, Clark and Berger, LLP, by Joe T. Knott, III, for defendant-appellees." ], "corrections": "", "head_matter": "LIBERTY MUTUAL INSURANCE CO. v. JUDY BASS PENNINGTON and RICK PENNINGTON\nNo. 185PA01\n(Filed 20 December 2002)\n1. Insurance\u2014 automobile \u2014 UIM\u2014notification\u2014statute of limitations\nUnder N.C.G.S. \u00a7 20-279.21(b)(4), there is no requirement that a UIM carrier be notified of a claim within the limitations period applicable to the underlying tort action. The language of the statute is clear, and nothing therein suggests that the notification requirement is subject to the statute of limitations.\n2. Insurance\u2014 automobile \u2014 UIM\u2014statute of limitations\u2014 action deriving from tort rather than statute\nThe limitations period for actions on statutory liabilities does not apply to defendant\u2019s claim for UIM coverage because the carrier\u2019s liability derives from that of the tortfeasor.\n3. Insurance\u2014 automobile \u2014 UIM\u2014failure to notify carrier of claim \u2014 good faith \u2014 material prejudice \u2014 issues of fact\nThe trial court erred by granting summary judgment for plaintiff in an action to determine UIM coverage where the issue of whether defendants are barred through failure to comply with notice provisions of the policy is not ripe. There were issues of fact as to whether defendants acted in good faith in failing to promptly notify plaintiff of the UIM claim and whether there was material prejudice to plaintiff\u2019s ability to investigate and defend the claim.\nOn writ of certiorari pursuant to N.C.G.S. \u00a7 7A-32(b) of a unanimous decision of the Court of Appeals, 141 N.C. App. 495, 541 S.E.2d 503 (2000), reversing and remanding an order for summary judgment entered 24 August 1999 by Parmer, J., in Superior Court, Wake County. Heard in the Supreme Court 16 October 2001.\nCranfill, Sumner & Hartzog, L.L.P., by Edward C. LeCarpentier III, for plaintiff-appellant.\nThompson, Smyth & Gioffi, L.L.P., by Theodore B. Smyth; and Pipkin, Knott, Clark and Berger, LLP, by Joe T. Knott, III, for defendant-appellees." }, "file_name": "0571-01", "first_page_order": 621, "last_page_order": 632 }