Isenhour v. Universal Underwriters Insurance

ARNOLD, Chief Judge. Plaintiffs contend the trial court erred in allowing defendants’ motion for summary judgment. Defendants, on the other hand, contend that summary judgment should be affirmed because the trial court correctly applied this Court’s decision in Watson. Defendants are correct. Defendants submitted two affidavits in support of their motion for summary judgment. In the first affidavit, Universal’s underwriting manager stated that Universal’s policy issued to Far East Motors was a fleet policy that insured a multiple and changing number of motor vehicles used in Far East Motor’s business. In the second affidavit, Nationwide, which had issued policies to both Clark, the tortfeasor, and the Isenhours, stated that both policies were nonfleet personal automobile insurance policies. On the basis of these two affidavits and this Court’s decision in Watson, the trial court granted summary judgment. At all times pertinent to this appeal, G.S. § 20-279.21(b)(4), relating to underin-sured motorist stacking, contained a proviso stating “this paragraph shall apply only to nonfleet private passenger motor vehicle insurance.” The paragraph referred to in the proviso allows the owner, “in instances where more than one policy may apply, the benefit of all limits of liability of underinsured motorist coverage under all such policies.” G.S. § 20-279.21(b)(4). In Watson, this Court, relying on the language in the proviso, held that fleet policies may not be stacked onto nonfleet policies under G.S. § 20-279.21(b)(4). Watson v. American National Fire Insurance Co., 106 N.C. App. 681, 417 S.E.2d 814 (1992), aff’d on other grounds, 333 N.C. 338, 425 S.E.2d 696 (1993). In Watson, this Court stated that [155] the appellee’s policy is a fleet policy under Sutton and excluded from inter-policy stacking, since the stacking provisions of N.C.G.S. § 20-279.21(b)(4) cover only nonfleet private passenger motor vehicle insurance. Aetna Casualty and Sur. Co. v. Fields, 105 N.C. App. 563, 414 S.E.2d 69 (1992). We recognize that inter-policy stacking is permitted so as to provide the innocent victim of an inadequately insured driver with an additional source of recovery; however, to allow stacking of a victim’s fleet policy onto the nonfleet policy of the insured-tortfeasor is a result contemplated neither by the insurer when it wrote the fleet policy nor the legislature when it wrote the statute. Id. at 686, 417 S.E.2d at 818. But see Sutton v. Aetna Casualty & Surety Co., 325 N.C. 259, 382 S.E.2d 759, reh’g denied, 325 N.C. 437, 384 S.E.2d 546 (1989) (stating that no reason exists to distinguish between fleet and nonfleet policies under interpolicy stacking). Our Supreme Court granted discretionary review of Watson. On review, that Court determined that the insurance policy at issue was exempt, via N.C. Gen. Stat. § 20-279.32 (1993), from the requirements of the Financial Responsibility Act, encompassing G.S. § 20-279.21(b)(4), entitling the plaintiff to “only such coverage as is provided in the policy.” Watson, 333 N.C. 338, 340, 425 S.E.2d 696, 697 (1993). The Supreme Court affirmed this Court’s decision without modification or reversal, despite conflicting language in Sutton indicating approval of the type of stacking barred by this Court in Watson. Thus, we must assume Watson is still binding on this Court. Watson, therefore, bars the coverage sought in this case and the trial court correctly granted summary judgment. In light of this determination, it is unnecessary to address plaintiffs’ specific contentions regarding summary judgment. Affirmed. Judges WELLS and EAGLES concur.