Safety Mutual Casualty Corp. v. Spears, Barnes, Baker, Wainio, Brown & Whaley

EAGLES, Judge. The issue here is whether the trial court erred in granting summary judgment for defendants. We hold that the trial court did not err. Accordingly, we affirm the judgment. Summary judgment is appropriate if there is no genuine issue of material fact and a party is entitled to judgment as a matter [470] of law. G.S. 1A-1, Rule 56. Defendants contend that they are entitled to summary judgment because the plaintiffs’ contribution actions against DOT and REA were not time barred when defendants withdrew as plaintiffs’ counsel in the third-party action. Contribution is governed by Chapter IB of the General Statutes. Both parties agree that this case is controlled by G.S. lB-3(d), which provides: If there is no judgment for the injury or wrongful death against the tort-feasor seeking contribution, his right of contribution is barred unless he has either (1) Discharged by payment the common liability within the statute of limitations period applicable to claimant’s right of action against him and has commenced his action for contribution within one year after payment, (2) Agreed while action is pending against him to discharge the common liability and has within one year after the agreement paid the liability and commenced his action for contribution, or (3) While action is pending against him, joined the other tort-feasors as third-party defendants for the purpose of contribution. The record reveals that third-party claims for contribution were brought on behalf of plaintiffs while the two actions at issue were pending. Accordingly, G.S. lB-3(d)(3) applies. However, in this case the underlying claims were settled and dismissed with no judgment entered against plaintiffs or their insured. Plaintiffs contend that G.S. lB-3(d)(3) provides for a one-year limitation period for refiling the contribution claims while defendants contend that a three-year limit applies. We hold that G.S. lB-3(d)(3) must be read to provide for a three-year statute of limitations. Unlike G.S. 1B-3(d)(1) and (d)(2) which explicitly state a one-year statute of limitation, G.S. lB-3(d)(3) is silent as to the statute of limitations period. The Supreme Court has said, “[t]he statute of limitations, although not an unconscionable defense, is not such a meritorious defense that either the law or the facts should be strained in aid of it.” Hardbarger v. Deal, 258 N.C. 31, 35, 127 S.E.2d 771, 774 (1962) (quoting Rochester v. Tulp, 54 Wash. 2d 71, 337 P.2d 1062 (1959)). “[I]f the Legislature has failed to fix [471] any time, the Courts cannot, in a given case, supply this legislative lapse. The fixing of the time within which to bring suit, under such circumstances, is purely a legislative function. It is not within the power of the judiciary.” Barnhardt v. Morrison, 178 N.C. 563, 568, 101 S.E. 218, 221 (1919) (quoting Adams and Freese Co. v. Kenoyer, 16 L.R.A. (N.S.) 683). Here, the legislature has failed to fix a time in G.S. lB-3(d)(3) for refiling contribution claims in the situation where a party brings a claim for contribution that is voluntarily dismissed after settlement of the underlying claim. However, the legislature has provided that a three-year statute of limitations applies “[u]pon a liability created by statute, either state or federal, unless some other time is mentioned in the statute creating it.” G.S. 1-52(2). G.S. lB-3(d)(3) mentions no other time, and we hold that the three-year limit in G.S. 1-52(2) must apply here. “It is the general rule that the act of payment of compensation to the injured person in satisfaction or partial satisfaction of the common liability fixes and determines the right of action of one joint tortfeasor against another for contribution. His cause of action for contribution accrues at that time, not before, and in the absence of waiver or the like, exists until barred by the pertinent statute of limitations.” 18 Am. Jur. 2d Contribution § 78 (1985). “North Carolina follows the general rule that a cause of action on an obligation to indemnify normally accrues when the indemnitee suffers actual loss. The same rule applies to the accrual of a cause of action for contribution between joint tort-feasors.” Premier Corp. v. Economic Research Analysts, Inc., 578 F.2d 551, 553-54 (4th Cir. 1978) (citations omitted). Here, the record does not indicate precisely on what date payment was made in the settlement of the two lawsuits at issue. However, the record does establish that New Jersey Manufacturers Insurance Company issued a check on 5 August 1987 in settlement of one lawsuit and another check on 25 November 1987 in settlement of the other lawsuit. New Jersey Manufacturers gave instructions to hold the checks in escrow until receipt of “the Release and Stipulation of Dismissal” and “the appropriate closing documents.” Assuming that payment was made on the dates above, the third-party actions would not have been time barred until August 1990 and November 1990, approximately one year after defendants’ withdrawal as counsel in September 1989. Accordingly, we hold [472] that the trial court correctly granted summary judgment for defendants. Because we have resolved this controversy as discussed above, we need not reach and expressly decline to reach the troublesome issue of whether and to what extent, if any, that legal malpractice claims may be assigned by insured persons to their insurers. See Hurst v. West, 49 N.C. App. 598, 272 S.E.2d 378 (1980); Christison v. Jones, 83 Ill. App. 3d 334, 405 N.E.2d 8 (1980). Affirmed. Judges Johnson and Parker concur.