State Farm Mutual Automobile Insurance v. Blackwelder

/PHILLIPS, Judge. By paying its underinsured motorist insurance limits to Maureen Sargeant for damages negligently caused by the decedent tort-feasor, Clyde W. Blackwelder, State Farm became subrogated to her rights against the Blackwelder estate. Dowdy v. Southern Railway Co., Inc., 237 N.C. 519, 75 S.E.2d 639 (1953). In dismissing • plaintiff’s subrogation action against the estate the court was ap [658] parently of the opinion that the action was barred by the prior dismissal of Maureen Sargeant’s action against the Blackwelder estate, since State Farm, as her subrogee, in effect stood in her shoes. The judgment is erroneous and we reverse. G.S. 20-279.21(b)(4) provides in pertinent part that: An underinsured motorist insurer may at its option, upon a claim pursuant to underinsured motorist coverage, pay moneys without there having first been an exhaustion of the liability policy covering the ownership, use, and maintenance of the underinsured highway vehicle. In the event of such payment, the underinsured motorist insurer shall be either: (a) entitled to receive by assignment from the claimant any right or (b) subrogated to the claimant’s right regarding any claim the claimant has or had against the owner, operator, or maintainer of the underinsured highway vehicle . . . No insurer shall exercise any right of subrogation . . . where the insurer has been provided with written notice in advance of a settlement between its insured and the underinsured motorist and the insurer fails to advance a payment to the insured in an amount equal to the tentative settlement within 30 days following receipt of such notice. Further, the insurer shall have the right, at its election, to pursue its claim by assignment or subrogation in the name of the claimant, and the insurer shall not be denominated as a party in its own name except upon its own election. A tort-feasor may not defeat an insurance carrier’s subrogation rights when he has knowledge of the subrogated claim and thereafter secures a consent judgment or release from the injured or damaged party. Nationwide Mutual Insurance Company v. Spivey, 259 N.C. 732, 131 S.E.2d 338 (1963); Phillips v. Alston, 257 N.C. 255, 125 S.E.2d 580 (1962). In Nationwide Mutual Insurance Company v. Canada Dry Bottling Company, 268 N.C. 503, 508, 151 S.E.2d 14, 17 (1966) (citations omitted), it was stated: After the insured has received payment under a policy, the tort-feasor, having knowledge of this fact, cannot defeat the insurer’s right to subrogation by any settlement with the insured. If with knowledge of the previous payment by the insurer the tort-feasor does procure a release from the insured, such release will constitute no defense as against the insurer, [659] nor will the insurer be allowed to recover the payment made to the insured. See also 7 Strong’s N.C. Index 3d Insurance Sec. 75.2; 44 Am. Jur. 2d Insurance Secs. 1810, 1811 (1982); Annotation, Rights and remedies of property insurer as against third-person tortfeasor who has settled with insured, 92 A.L.R.2d 102 (1963); 46 C.J.S. Insurance Sec. 1209 (1946). Reversed. Judges Arnold and Wells concur.