North Carolina Farm Bureau Mutual Insurance v. Ayazi

EAGLES, Judge. Initially, we address Nationwide’s contention that this appeal is moot. Nationwide argues that because Farm Bureau is the primary carrier Farm Bureau’s settlement with Ayazi removes any issue for resolution from before this court. This argument overlooks the express purpose of Farm Bureau’s appeal, determination of whether Farm Bureau is a responsible party. If we were to hold that Hashemi was not an insured under the Farm Bureau policy, Farm Bureau would have a claim against Nationwide based on equitable subrogation. See, e.g., Jamestown Mut. Ins. Co. v. Nationwide Mut. Ins. Co., 277 N.C. 216, 176 S.E.2d 751 (1970). Accordingly, we hold that this appeal is not moot, and we address the appeal on its merits. Farm Bureau concedes that the policy Henderson had with them was in effect at the time of the 17 October 1988 accident; that the motor home was a “covered auto” under the policy; and that Henderson was insured under the policy. However, Farm Bureau argues that Faroukh Hashemi was not an insured under the policy. Thus, the issue here is whether Hashemi was insured under the [478] Farm Bureau policy. The Farm Bureau policy provides in pertinent part: D. Who Is Insured. * * * 2. Anyone else is an insured while using with your permission a covered auto you own, hire or borrow except: Because of Farm Bureau’s above listed concessions and because Farm Bureau has abandoned its second assignment of error, that Henderson gave Hashemi permission to drive the motor home, pursuant to N.C.R. App. P. 28(b)(5), the remaining determinative issue is whether, for purposes of the Farm Bureau policy, Henderson was the owner of the motor home at the time of the accident. We hold that he was the owner of the motor home and accordingly affirm the trial court’s decision. Jenkins v. Aetna Casualty and Surety Co., 324 N.C. 394, 378 S.E.2d 773 (1989) controls here. The facts of Jenkins were as follows: Patterson purchased an automobile from Junior for $400 cash and took possession of the vehicle. No certificate of title was passed in the transaction. Several years later Patterson was driving the car when it was involved in an accident. A passenger in the car was injured; the passenger sued and obtained a judgment against Patterson. Patterson then brought suit against the defendant insurance company to satisfy the judgment. On appeal this court held that Patterson “owned” the vehicle because he acquired an equitable interest in the car by paying full price for the vehicle and by taking possession of it. Jenkins v. Aetna Casualty and Surety Co., 91 N.C. App 388, 371 S.E.2d 761 (1988). On further appeal, however, the Supreme Court disagreed and reversed. The Supreme Court held: N.C.G.S. § 20-72 requires proper execution of an assignment and delivery of the certificate of title before “legal” title and ownership pass. Applying the statutory definition of “owner,” the statutory requirements for passing title and the statutory requirements for liability insurance, we have held that for purposes of tort law and liability insurance coverage, no ownership passes to the purchaser of a motor vehicle which requires registration until: (1) the owner executes, in the presence of a person authorized to administer oaths, an assignment and warranty of title on the reverse of the certificate of title, [479] including the name and address of the transferee; (2) there is an actual or constructive delivery of the motor vehicle; and (3) the duly assigned certificate of title is delivered to the transferee (or lienholder in secured transactions). (Citation and footnote omitted.) * * * The evidence before the trial court in this case established that Patterson paid $400 cash as the total price for the Camaro and took immediate possession of the vehicle, but he never received the certificate of title. There was no indication from the forecast of evidence presented to the trial court that the owner, Jerome Hall, ever properly executed an assignment of the certificate of title. Clearly, the parties to this transaction did not comply with the requirements of N.C.G.S. § 20-72(b) for the transfer of legal title and ownership. As this Court has construed the relevant statutory provisions, there had been no transfer of title and ownership of the Camaro to Patterson. Therefore, Patterson did not “own” the vehicle within the terms of the liability insurance policy. Jenkins, 324 N.C at 398-99, 378 S.E.2d at 776. Here, Hashemi assumed the loan on the motor home .and took immediate possession of the vehicle. However, the certificate of title was never executed in favor of Hashemi. Accordingly, under the Jenkins holding, for purposes of the Farm Bureau policy, Hashemi is not the owner of the motor home. Ownership remains with Henderson, and Farm Bureau is liable. Notwithstanding Jenkins, Farm Bureau argues that this court should establish an exception to the three requirements quoted above and deem Hashemi to be the owner of the motor home. In support of this argument Farm Bureau cites Ohio Casualty Insurance Co. v. Anderson, 59 N.C. App. 621, 298 S.E.2d 56 (1982). Farm Bureau also argues that the lienholder, First Credit, held the certificate of title and that both Henderson and Hashemi executed the following power of attorney forms as part of the “Transfer Agreement.” I hereby appoint . . . Chrysler First Credit Corporation, as my attorney-in-fact, to apply for a certificate or duplicate certificate of title to, and to register; (and/or) to transfer title [480] or equity to; the vehicle . . . and for said purpose(s) to sign my ñame and do all things necessary to this appointment. We recognize that Anderson established an exception to the three requirements listed above. However, we believe that Anderson is distinguishable from the instant case for the reasons stated in Jenkins. See Jenkins, 324 N.C. at 400, 378 S.E.2d at 777. Accordingly, we decline to establish another exception to the three requirements and we affirm the decision below. Our disposition of this appeal does not prejudice any cause of action Farm Bureau may have against First Credit. Affirmed. Judges Arnold and Wells concur.