Jones v. Nationwide Mutual Insurance

ARNOLD, Judge. Defendant contends that this action does not involve the financial responsibility laws of the state, but instead is a claim based upon a contract. Plaintiff’s position is that G.S. 20-279.21(b)(2) controls. G.S. 20-279.21 defines “motor vehicle liability policy.” Subsection (b)(2) reads in pertinent part: Such owner’s policy of liability insurance . . . [s]hall insure the person named therein and any other person . . . using any such motor vehicle . . . with the express or implied permission of such named insured, or any other persons in lawful possession, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicle. . . . [45] Plaintiff argues that Jerry Jones was a “person in lawful possession” and that, accordingly, the statute applies to make him an insured. However, even if Jerry Jones was in lawful possession of the Ostendorf automobile, a question we do not decide, the statute would make him an insured under the owner’s policy only “against loss from the liability imposed by law for damages.” The coverage at issue here is medical payments coverage, which does not protect the insured against his liability to others, but which instead pays to the insured or certain named others enumerated expenses — medical, nursing, funeral, etc. — associated with an accident. This coverage is not required by G.S. 20-279.21, and by the terms of subsection (g), [a]ny policy which grants the coverage required for a motor vehicle liability policy may also grant any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy and such excess or additional coverage shall not be subject to the provisions of this Article. With respect to a policy which grants such excess or additional coverage the term ‘motor vehicle liability policy’ shall apply only to that part of the coverage which is required by this section. Defendant is correct that this action is a claim based upon a contract, the terms of which control. By the medical payments endorsement of the policy issued to Ralph Ostendorf, defendant is obligated to pay for the funeral services of “each person whose . . . death was accidentally sustained while in . . . the described automobile, provided it was, at the time, being used by the Policyholder, by a resident of the same household or by any other person with permission of the Policyholder or his spouse residing in the same household.” The trial court found as fact that Jerry Jones was operating the Chevrolet with the permission of the named insured, and defendant argues that there is no evidence to support this finding. Ralph Ostendorf testified by deposition that when he loaned the car to his son Stephen he “[definitely told him not to loan the car out and not to let anybody else drive or use it.” Ostendorf never gave Jerry Jones permission to use the automobile. Stephen testified that his father loaned him the car, and “I was not to let anybody else use it or loan it out.” Stephen let Jerry [46] Jones use the car without telling him of his father’s restriction. After the accident Stephen told several people “that Jerry had my permission to use the car. I told them that Jerry had permission to drive the car.” There is no evidence in the record that Jerry Jones had the permission “of the Policyholder or his spouse residing in the same household” to use the automobile; all the evidence is to the contrary. It may be that Jones thought he had permission, but that is not enough. The policy applies not the subjective test, but the objective test: did the person in fact have the permission of the policyholder or his spouse? The finding of fact that Jerry Jones was operating the automobile with the permission of the named insured is unsupported by the evidence and cannot stand. Defendant’s argument is that because the plaintiff failed to establish a right to recover, defendant was entitled to a directed verdict. As plaintiff points out, defendant’s motion for a directed verdict should have been denominated a motion for involuntary dismissal under Rule 41(b), since this action was tried by the court without a jury. An involuntary dismissal under Rule 41(b) is to be granted if the plaintiff has shown no right to relief or if she has shown a right to relief but the trial court as trier of fact determines that defendant is entitled to a judgment on the merits. Airport Knitting, Inc. v. King Kotton Yarn Co., Inc., 11 N.C. App. 162, 180 S.E. 2d 611 (1971). By denial of defendant’s motion and entry of judgment for plaintiff the trial court here has concluded by implication that plaintiff presented sufficient evidence to show a right to relief, but this conclusion is not supported by findings of fact based on competent evidence. To establish a right to recover under the Ostendorf policy, it was necessary for plaintiff to show compliance with the terms of the policy, that is, permission of the policyholder or his spouse. As we have set out above, she has not done so. Defendant is entitled to a judgment in his favor. Since we find for defendant, we need not consider his second assignment of error, going to the alleged failure of the trial court to set out findings of fact and conclusions of law to support its judgment. The decision of the trial court is [47] Reversed. Judges MARTIN (Robert M.) and ERWIN concur.