Turner v. Masias

243 S.E.2d 401 (1978)

Henry T. TURNER, First Party Plaintiff, American Security Insurance Company, Second Party, Plaintiff, v. Raymond MASIAS, First Party Defendant, Robert Hugh Pearson, Second Party Defendant, Allstate Insurance Company, Third Party, Defendant.

No. 777DC363.

Court of Appeals of North Carolina.

May 2, 1978.

*403 Grover Prevatte Hopkins by Herbert Frank Allen, Tarboro, for plaintiffs-appellants.

Moore, Diedrick & Whitaker by L. G. Diedrick, Rocky Mount, for defendant-appellee, Allstate Ins. Co.

MITCHELL, Judge.

The sole question presented by this appeal is whether paragraph 5(d) of Allstate's uninsured motorist coverage contract is a valid and enforceable provision and does not violate the terms or intent of the Motor Vehicle Safety-Responsibility Act of 1953, G.S. 20-279.1 through G.S. 20-279.39 [hereinafter the "Act"]. American contends that the reduction clause in Allstate's uninsured motorist policy frustrates the intent and violates the terms of G.S. 20-279.21(b)(3), which requires that:

No policy of bodily injury liability insurance, covering liability arising out of the ownership, maintenance, or use of any motor vehicle, shall be delivered or issued for delivery in this State with respect to any motor vehicle ... unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in subsection (c) of G.S. 20-279.5.... Such provisions shall include coverage for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of injury to or destruction of the property of such insured, with a limit in the aggregate for all insureds in any one accident of five thousand dollars ($5,000) and subject, for each insured, to an exclusion of the first one hundred dollars ($100.00) of such damages.

It is clear that "other insurance" clauses in policies providing uninsured motorist coverage may not be enforced if such enforcement results in limiting an insured to recovery of an amount equal only to the coverage compelled by the Act, when the actual damages suffered by the insured are greater than that amount. In Moore v. Insurance Co., 270 N.C. 532, 543, 155 S.E.2d 128, 136 (1967), the Supreme Court of North Carolina stated:

In our opinion our statute is designed to protect the insured as to his actual loss within such limits, but being of statutory origin it was not intended by the General Assembly that an insured shall receive *404 more from such coverage than his actual loss, although he is the beneficiary under multiple policies issued pursuant to the statute. It seems clear that our statute does not limit an insured only to one $5,000 recovery under said coverage where his loss for bodily injury or death is greater than $5,000, and he is the beneficiary of more than one policy issued under G.S. 20-279.21(b)(3).

The problem presented by the present case, however, differs from that presented in Moore. Here, the injured insured has been made entirely whole by the coverage provided under the collision policy of American. Although the "other insurance" clause in Allstate's uninsured motorist coverage would be invalid to prevent the insured from being made whole, we do not find the use of such clauses to establish the rights of insurers in cases in which the damages were less than the coverage required by the Act to be offensive to either the terms or intent of the Act. See generally, Annot. 28 A.L.R.3d 551 (1969). The fact that two policies of insurance of different types are combined to provide the uninsured motorist coverage required by the Act does not contravene its terms and, in fact, is specifically provided for. G.S. 20-279.21(j); see Insurance Co. v. Insurance Co., 269 N.C. 341, 152 S.E.2d 436 (1967).

The "other insurance" clause of Allstate's uninsured motorist policy does not violate the intent of the Act upon the facts presented by this case. As the Supreme Court of Florida has stated:

There is no basis in the record before us for the conclusion that public policy will be violated by the enforcement of clause 3(b)(4) [similar to Allstate's 5(d)] although we cannot and do not hold that this will be true in every case. For aught that appears here, sufficient financial responsibility is provided for the protection of the public, and this is nothing more than a contest between insurance companies.

Continental Cas. Co. v. Weekes, 74 So. 2d 367, 46 A.L.R.2d 1159 (1954), quoted with approval in Insurance Co. v. Insurance Co., 269 N.C. 341, 353, 152 S.E.2d 436, 445 (1966).

Neither the language of the Act nor the public policy served by it is concerned with which insurance company makes the insured whole, so long as the "other insurance" clause is not used to defeat recovery of actual damages by an insured who has not rejected uninsured motorist coverage. The insured having recovered his actual damages in this action, the trial court did not err in granting summary judgment in favor of Allstate and against American.

As we have found the "other insurance" clause of Allstate's policy does not on these facts violate the Act, Allstate is entitled to have that clause enforced as written. Where, as here, a contract is not contrary to public policy or prohibited by statute, the constitutional guarantee of freedom to contract requires that it be enforced. Muncie v. Insurance Co., 253 N.C. 74, 116 S.E.2d 474 (1960).

As pointed out by the trial court, Turner has recovered more under American's $50 deductible collision policy than he would have recovered under Allstate's $100 deductible uninsured motorist coverage. As he has been made whole, the trial court committed no error in granting summary judgment in favor of Allstate and against him.

We hold the judgment of the trial court was proper, and it is

Affirmed.

MORRIS and CLARK, JJ., concur.