Czarnecki v. American Indemnity Company

Rodman, J. Defendant, on 7 November 1959, issued to plaintiff and her husband its “Family Combination Automobile Policy” in *719 suring plaintiff and her husband with respect to ownership of two automobiles for (A) bodily injury liability, (B) property damage liability, (C) medical payments. The policy states the premium paid for each of the two cars for each of the coverages. It fixes the limit of liability for bodily injury for each person at $10,000 and for each occurrence at $20,000. It fixes the liability for property damage at $10,000 for each occurrence. It fixes the limit of liability for medical payments at $2,000 for each person. The policy is divided into parts. Part 1 is entitled “Liability.” This part fixes defendant’s obligation under coverages A and B, that is, bodily injury liability and property damage liability. Part 2 is headed “EXPENSES FOR MEDICAL SERVICES.” It provides: “Coverage C — Medical Payments: To pay all reasonable expenses incurred within one year from the date of accident for necessary medical, surgical, X-ray and dental services. . .: to or for the named insured and each relative who sustains bodily injury. . . caused by accident, while occupying or through being struck by an automobile.” The total of the liability which plaintiff would impose on defendant is within the $2,000 limitation fixed by the policy. Defendant further limits its liability by the language of the policy: “to pay all reasonable expenses incurred within one year from the date of the accident.” Judge Phillips, in imposing liability on defendant for all the expenses incurred, held: “That although a part of said medical treatment went beyond the twelve-month period, the limitation set out in said insurance policy was not a valid limitation, because all medical expenses incurred related back to the time of the accident.” The quoted provision is not void. An insurance policy is a contract between insurer and insured. The parties are at liberty to make such contract as they deem advantageous unless restricted by statute in the exercise of the police power. Utilities Comm. v. Greyhound Corp. 252 N.C. 18, 113 S.E. 2d 57; Bayside Fish Flour Co. v. Gentry, 297 U.S. 422, 80 L. ed. 772. Our attention has not been called to any statute or regulation requiring insurance companies affording protection against medical expenses incurred on account of injuries accidentally sustained to obligate themselves to pay for an indefinite period. No sound reason exists why the parties may not fix a time limitation as well as a limitation on the amount of liability. Since the provision is valid, the only question left for consideration is: What is the extent of defendant’s obligation? The answer is to be found in the language which the parties have chosen to express their *720 contract. Parker v. Ins. Co., 259 N.C. 115, Strickland v. Jackson, 259 N.C. 81; Muncie v. Ins. Co., 253 N.C. 74, 116 S.E. 2d 474. The language of the policy obligates defendant to pay “expenses incurred within one year from the date of accident.” Plaintiff would rewrite the provision to read "pay all expenses incurred because of accidental injuries”; but she stipulated defendant “has paid a total amount of $1,054.05, which amount is for all of the medical expenses of the Appellant (plaintiff) incurred within one (1) year from the date of the accident except for the sum of $90.15.” (Emphasis added.) The very language which the parties selected to state the facts is the language chosen to measure defendant’s obligation. “Incur” is defined by Webster as: “1: to meet or fall in with (as an inconvenience) ; become liable or subject to: bring down upon oneself (incurred large debts to educate his children).” Courts have accepted Webster’s definition as the correct meaning of the word. Weinberg Co. v. Heller, 239 P. 358; Flanagan v. Baltimore & O. Ry. Co., 50 N.W. 60; Pilot Life Ins. Co. v. Stephens, 103 S.E. 2d 651; Bartlett v. Vanover, 86 S.W. 2d 1020; Gordon v. Fidelity & Casualty Co. of N.Y., 120 S.E. 2d 509; Drearr v. Conn. Gen. Life Ins. Co., 119 So. 2d 149. It is suggested that Maryland Casualty Co. v. Thomas, 289 S.W. 2d 652, points to a different conclusion. A careful reading of the case and understanding of the facts there involved distinguish that case from the case under consideration. There the policy provision was identical with the provision in this case except the limitation as to the amount of insurance. There the total amount for which defendant obligated itself was $1,000. Here it is $2,000. There a nine-year-old boy was injured on 25 July 1953 in an automobile accident. The insurance ran to the father. The Court refers to it as a liability policy. Extensive dental work was necessary but because of the age of the child and the necessity of a bridge, the work could not be done until he had permanent teeth to which a bridge could be anchored. The father obtained estimates as to the cost of the work from several dentists. On 22 July 1954 he contracted with Dr. Wood, fixing the amount of his charges for the services to be rendered, and paid him for the services to be thereafter performed. The Court held under those facts the expenses bad been incurred, that is, the obligation created within the one-year period. The policy sued on insured plaintiff for a term of one year, that is, from 7 November 1959 to 7 November I960, but the expiration date of the policy did not terminate defendant’s liability for medical expenses incurred for accidental injuries sustained prior to 7 November 1960 until the expiration of one year from the date of the accident. *721 Defendant is liable for $90.15, the unpaid balance of expenses incurred prior to 16 May 1961. It has admitted its liability for this sum. It is not, however, liable for any expenses incurred after 15 May 1961. Reversed.