Nationwide Mutual Insurance v. Massey

ARNOLD, Judge. Farm Bureau contends that the trial court erred in granting summary judgment for the administratrix and in denying its motion for summary judgment. Specifically, Farm Bureau contends that the trial court’s interpretation was contrary to both the language of the policy and the applicable North Carolina case law. We agree. The decedent’s Farm Bureau policy provided coverage for bodily injury resulting from an accident caused by the owner or driver of a vehicle “[f]or which the sum of all bodily injury liability .. . policies at the time of an accident provides at least the amounts required [by statute] but their limits are less than the limits of this insurance. . . .” The endorsement which provided this coverage also required that “[a]ny amount payable under this insurance shall be reduced by . . . [a]ll sums paid by or for anyone who is legally responsible, including all sums paid under the policy’s Liability Insurance.” Thus, under the provisions of the Farm Bureau policy, the $60,000.00 paid by Nationwide should be deducted from the $100,000.00 Farm Bureau policy limit, leaving Farm Bureau liable for $40,000.00 under its policy. The confusion in this case arises because the endorsement which provides the cited coverage is entitled “UNINSURED MOTORISTS INSURANCE.” The policy’s definition of “uninsured motor vehicle” includes the above cited language providing coverage for *450 bodily injury. This language tracks the statutory definition of “un-derinsured” motorist coverage. See G.S. 20-279.21 (1981). Yet, no matter how the insurance coverage is denominated, the policy requires that the coverage is to be limited by reducing the amount payable by all sums paid by or for anyone who is legally responsible. To the extent coverage provided by motor vehicle liability insurance policies exceeds the mandatory minimum coverage required by statute, the additional coverage is voluntary, and is governed by the terms of the insurance contract. Government Employees Insurance Co. v. Herndon, 79 N.C. App. 365, 339 S.E. 2d 472 (1986). The Farm Bureau coverage does exceed the statutory minimum. See G.S. 20-279.21 (1981). We therefore find that the trial court’s conclusion that Farm Bureau was liable for $100,000.00 in addition to the amount owed by Nationwide, and the court’s entry of summary judgment for the administratrix, were in error. The judgments of the trial court are reversed, and the cause is remanded to the Superior Court of Orange County for entry of judgment awarding the administratrix $40,000.00 pursuant to the Farm Bureau policy. Reversed and remanded. Judges WELLS and BECTON concur.