Sawyers v. Farm Bureau Insurance

WYNN, Judge.

Section 20-279.21(b)(3) of the North Carolina Motor Vehicle Safety and Financial Responsibility Act provides that an "insurer shall be bound by a final judgment taken by the insured against an uninsured motorist if the insurer has been served with a copy of summons, complaint or other process...." N.C. Gen.Stat. § 20-279.21(b)(3) (2003). Here, Plaintiff Michelle L. Sawyers contends that because she served Defendant Farm Bureau Insurance of N.C., Inc. with the summons and complaint of her Florida uninsured motorist action, Farm Bureau is bound by the Florida judgment. Because Section 20-279.21(b)(3) plainly states that an insurance company is bound if the insured effectuates service of process on an insurer in an uninsured motorist action, genuine issues of fact exist as to whether Farm Bureau is bound by the judgment in this action. Accordingly, we remand this matter for trial.

The record on appeal tends to show that in August 1996, Ms. Sawyers was a passenger in a vehicle owned and operated by Steven Sawyers, her then fiancé and later husband, when it was involved in an automobile accident in Florida. The driver of the other vehicle involved in the accident, Reginald T. Bembow, Jr., was an alleged uninsured motorist. Ms. Sawyers had uninsured motorist coverage with Progressive Southeastern and, through Steven Sawyers, with Farm Bureau.

On 28 May 1999, Ms. Sawyers filed suit in Brevard County, Florida, naming Bembow, Farm Bureau Mutual Insurance Company,¹ and Progressive Southeastern as defendants. A summons was issued to Farm Bureau on 28 May 1999. On 8 June 1999, L. Becky Powell, Special Deputy for Service of Process to the North Carolina Commissioner of Insurance accepted service of the summons and complaint, and sent the summons and complaint, along with a letter, to Farm Bureau on 9 June 1999. The summons and complaint were stamped "Received June 10, 1999 Farm Bureau Ins. Group."

On or around 23 June 1999, A. Craig Cameron, an attorney, made a Special Notice of Appearance and Motion to Dismiss for Farm Bureau. The basis of the motion to dismiss was that the Florida court "lacks jurisdiction over the person of the Defendant corporation...." On 10 August 1999, a default was entered against Bembow and a copy of the default entry was sent to Mr. Cameron. On or around 20 September 1999, Ms. Sawyers and Farm Bureau executed a Joint Motion for Order of Dismissal. The text of the joint motion read:

The Plaintiff, MICHELLE SAWYERS, and Defendant NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, by and through their undersigned attorneys, jointly move this Honorable Court for an Order dismissing this case without prejudice as to Defendant NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY only. This motion is brought pursuant to F.R.C.P. 1.420 and N.C. R. Civ. P. 41(a)(1), as the Plaintiff intends to re-file the action in a court of competent jurisdiction in North Carolina.

*187On 1 October 1999, the Florida trial court entered the order of dismissal without prejudice. The text of the order read:

THIS CAUSE came on before me upon the above Joint Motion of the parties for an Order dismissing this cause without prejudice as to Defendant NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY only. The Court having reviewed the file and being otherwise duly advised in the premise herein, it is hereby ORDERED AND ADJUDGED that: 1. This case, be and the same, is hereby dismissed without prejudice pursuant to F.R.C.P. 1.420 and N.C.R. Civ. P.41(a)(1), with each party to bear her own costs. 2. Defendant NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY will be removed from the case style for all prospective matters.

The record reflects that on 17 October 2000, Ms. Sawyers received a final judgment in the amount of $200,000.00, plus $188.00 in costs, against Bembow. On 1 November 2000, Ms. Sawyers' attorney notified Farm Bureau of the final judgment and requested payment of the policy limit of $25,000; Farm Bureau declined. On 11 April 2002, Ms. Sawyers instituted an action in North Carolina for breach of contract by failing to pay the $25,000 maximum toward the judgment against Bembow and for unfair and deceptive insurance practices. On 12 December 2002, Ms. Sawyers voluntarily dismissed the suit, which she then refiled on 23 June 2003. Farm Bureau filed an answer on 4 August 2003, and a motion for summary judgment on 23 December 2003. Ms. Sawyers filed a motion for summary judgment on 2 February 2004. The trial court granted Farm Bureau's motion for summary judgment, denied Ms. Sawyers' motion for summary judgment, and Ms. Sawyers appealed to this Court.

On appeal, Ms. Sawyers contends that the trial court erred in granting Farm Bureau's motion for summary judgment and denying her motion for summary judgment. "Summary judgment is appropriate when the ``pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.'" Hooks v. Eckman, 159 N.C.App. 681, 684, 587 S.E.2d 352, 354 (2003) (quoting N.C. Gen.Stat. § 1A-1, Rule 56(c) (2001)). "The movant must clearly demonstrate the lack of any triable issue of fact and entitlement to judgment as a matter of law." Marcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C. 214, 220, 513 S.E.2d 320, 324 (1999). In reviewing a motion for summary judgment, we must view the evidence in the light most favorable to the non-moving party. Id.

Ms. Sawyers first argues that the trial court erred in granting Farm Bureau's motion for summary judgment because Farm Bureau is bound by the Florida judgment against the uninsured motorist. We agree.

North Carolina General Statutes has a Motor Vehicle Safety and Financial Responsibility Act, the purpose of which "is to compensate the innocent victims of financially irresponsible motorists. It is a remedial statute to be liberally construed so that the beneficial purpose intended by its enactment may be accomplished." Sutton v. Aetna Cas. & Sur. Co., 325 N.C. 259, 265, 382 S.E.2d 759, 763 (1989) (internal citations omitted) (citing American Tours, Inc. v. Liberty Mutual Ins. Co., 315 N.C. 341, 346, 338 S.E.2d 92, 96 (1986); Nationwide Mut. Ins. Co. v. Chantos, 293 N.C. 431, 440, 238 S.E.2d 597, 604 (1977); Moore v. Hartford Fire Ins. Co. Group, 270 N.C. 532, 535, 155 S.E.2d 128, 130-31 (1967)). Section 20-279.21(b)(3) of the Act states that every North Carolina automobile insurance policy covering bodily injury:

shall be subject to the following provisions which need not be contained therein.

a. A provision that the insurer shall be bound by a final judgment taken by the insured against an uninsured motorist if the insurer has been served with copy of summons, complaint or other process in the action against the uninsured motorist by registered or certified mail, return receipt requested, or in any manner provided by law[.]

*188N.C. Gen.Stat. § 20-279.21(b)(3) (emphasis added); see also Grimsley v. Nelson, 342 N.C. 542, 548, 467 S.E.2d 92, 96 (1996) ("[A]ll insurance policies in the State will be deemed to include a provision that the insurer shall be bound by a final judgment taken by the insured against an uninsured motorist, providing the insurer is served with a copy of summons and complaint." (quotation and emphasis omitted)).

"Where the statutory language is clear and unambiguous, the Court does not engage in judicial construction but must apply the statute to give effect to the plain and definite meaning of the language." Carolina Power & Light Co. v. City of Asheville, 358 N.C. 512, 518, 597 S.E.2d 717, 722 (2004) (quotation omitted); see also, e.g., McNally v. Allstate Ins. Co., 142 N.C.App. 680, 682, 544 S.E.2d 807, 809 (2001) ("Where the language of a statute is unambiguous, the language of the statute controls.").

Here, North Carolina General Statute section 20-279.21(b)(3) is clear and unambiguous, and we therefore must give effect to the plain and definite meaning of its language. Carolina Power & Light, 358 N.C. at 518, 597 S.E.2d at 722. Dictionaries may be used to determine the plain meaning of language. State v. Martin, 7 N.C.App. 532, 533, 173 S.E.2d 47, 48 (1970). The plain meaning of the word "shall" is "imperative or mandatory." Black's Law Dictionary 1541 (4th ed. 1968) ("As used in statutes, contracts, or the like, this word is generally imperative or mandatory."); see also, e.g., Gilbert's Pocket Size Law Dictionary 307 (1997) ("Denoting obligation or mandatory action."). Moreover, this Court has previously stated that "[t]he word ``shall' is defined as ``must' or ``used in laws, regulations, or directives to express what is mandatory.'" Internet E., Inc. v. Duro Communications, Inc., 146 N.C.App. 401, 405-06, 553 S.E.2d 84, 87 (2001) (quoting Webster's Collegiate Dictionary 1081 (9th ed.1991)).

Under North Carolina General Statute section 20-279.21(b)(3), once an insured effectuates service of process on an insurance company in an uninsured motorist claim, it is "imperative or mandatory" that the insurer be bound to a final judgment taken by the insured against an uninsured motorist. Therefore, if Ms. Sawyers served Farm Bureau by registered or certified mail, return receipt requested, or another manner provided by law, with copy of the summons, complaint, or other process in her Florida action against Bembow, Farm Bureau is bound by the final judgment Ms. Sawyers took against Bembow.²

Even if we found the statute unclear, we would still reach the same result. "[W]here a statute is ambiguous, judicial construction must be used[.]" McKinney v. Richitelli, 357 N.C. 483, 487-88, 586 S.E.2d 258, 262 (2003) (citing Young v. Whitehall Co., 229 N.C. 360, 49 S.E.2d 797 (1948)). The primary rule of construction "is to ascertain the intent of the legislature and to carry out such intention to the fullest extent." Id. (citation omitted). "Protection of innocent victims who may be injured by financially irresponsible motorists has repeatedly been held to be the fundamental purpose of North Carolina's Motor Vehicle Safety and Financial Responsibility Act." Hartford Underwriters Ins. Co. v. Becks, 123 N.C.App. 489, 492, 473 S.E.2d 427, 429 (1996) (citing Nationwide Mutual Ins. Co. v. Mabe, 342 N.C. 482, 493, 467 S.E.2d 34, 41 (1996)). "This purpose is best served when the statute is interpreted to provide the innocent victim with the fullest possible protection." Id. (citation omitted); Sutton, 325 N.C. at 265, 382 S.E.2d at 763 (the FRA is a "remedial statute [which must be] liberally construed so that the beneficial purpose intended by its enactment may be accomplished.").

Interpreting section 20-279.21(b)(3) to provide Ms. Sawyers with the fullest possible protection from a financially irresponsible uninsured motorist, we hold that, if service of process on Farm Bureau was effectuated in *189the Florida action, Farm Bureau is bound by the judgment in that action.

The contention, proffered by Farm Bureau and seemingly endorsed by the dissent, that Ms. Sawyers needed to file suit against Farm Bureau in North Carolina seems untenable and inconsistent with the stated policy that the statute is remedial and should be interpreted to provide the victim of a financially irresponsible motorist with the fullest possible protection. In Grimsley, our Supreme Court held that where a trial court lacked personal jurisdiction over an uninsured motorist, claims against the uninsured motorist insurance carrier, whose liability is only derivative, failed. Grimsley, 342 N.C. at 547-48, 467 S.E.2d at 95-96 (citing, inter alia, Brown v. Lumbermens Mut. Cas. Co., 285 N.C. 313, 319, 204 S.E.2d 829, 834 (1974) ("[p]laintiff's right to recover against his intestate's insurer under the uninsured motorist endorsement is derivative and conditional[ ]"); Spivey v. Lowery, 116 N.C.App. 124, 126, 446 S.E.2d 835, 837 (holding that because plaintiff released the tort-feasor, plaintiff may not assert a claim against the UIM carrier because of the derivative nature of the UIM carrier's liability), disc. review denied, 338 N.C. 312, 452 S.E.2d 312 (1994); Buchanan v. Buchanan, 83 N.C.App. 428, 350 S.E.2d 175 (1986) (same), disc. review denied, 319 N.C. 224, 353 S.E.2d 406 (1987)).

Here, as surely in many interstate vehicular accident cases, the courts of this State would not have had personal jurisdiction over the uninsured motorist. This accident did not occur in North Carolina, and nothing in the record indicates that Bembow, the uninsured motorist, was present or domiciled in North Carolina, or engaged in substantial activity in North Carolina. N.C. Gen. Stat § 1-75.4 (2003). Because the courts of this State would have lacked personal jurisdiction over Bembow, Ms. Sawyers would not have been able to bring suit against Farm Bureau here. Grimsley, 342 N.C. at 547-48, 467 S.E.2d at 95-96. Therefore, the contention that Ms. Sawyers could not have sued Farm Bureau in Florida, together with the law of this State indicating that Ms. Sawyers also could not have sued Farm Bureau here, would leave Ms. Sawyers with no venue for seeking recovery from Farm Bureau.

Nonetheless, Farm Bureau argues that, because it was dismissed as a party from the Florida action, it cannot be bound by the Florida judgment. It is unclear to this Court that Farm Bureau was not a party to the Florida action. Farm Bureau correctly states that our Supreme Court has held that an uninsured motorist and an insurance company are separate and distinct parties to an action brought by an insured against an uninsured motorist. Grimsley, 342 N.C. at 546, 467 S.E.2d at 95 (insurance company "is a separate party to the action between the insured plaintiffs and defendant [ ], an uninsured motorist[ ]").³ Nevertheless, North Carolina General Statute section 20-279.21(b)(3) states that "[t]he insurer, upon being served as herein provided, shall be a party to the action between the insured and the uninsured motorist...." N.C. Gen.Stat. § 20-279.21(b)(3). The statute is clear and unambiguous, and we therefore must give effect to the plain and definite meaning of its language. Carolina Power & Light, 358 N.C. at 518, 597 S.E.2d at 722. As stated earlier, the plain meaning of the word "shall" is "imperative or mandatory." Because it was "mandatory" or "imperative," upon service of process, for Farm Bureau to be a party to the Florida action, it is unclear that the voluntary dismissal of Farm Bureau as a party to the action was effectual if Farm Bureau received service of process.

In support of its argument that it is not bound by the Florida judgment because of the dismissal, Farm Bureau cites to State Farm Fire & Cas. Ins. Co. v. Terry, 230 Ga.App. 12, 495 S.E.2d 66 (1997). Not only is this Georgia case in no way binding, it is also distinguishable in crucial ways. In Terry, as here, the insurance company was served in the insured's action against an *190uninsured motorist. Also as here, the insurance company received consent to be dismissed from the case, in Terry because it appeared as if the defendant motorist was indeed insured. However, in contrast to this case, and, as the Terry court emphasized "most importantly," the Terry dismissal, which was signed by the insured's counsel, expressly stated that "[s]tipulations and defaults by, or Judgments against, [the uninsured motorist] will not be binding upon or create exposure by [the insurance company.]" Id. at 14, 495 S.E.2d at 69-70 (emphasis omitted). The dismissal also explicitly stated that the insurance company would "have a full right to defend [against the insured's claims] on liability and damages...." Id. The dismissal benefitted the insured by "(1) saving him the time and expense of litigating with [the insurance company] at a time when it was apparent his action did not involve an uninsured motorist and (2) affording him the ability to re-serve State Farm at a later date without fear that the statute of limitation had expired." Id. at 16, 495 S.E.2d at 70. After judgment against the motorist had been obtained and it became clear that the motorist's insurance coverage had "vanished," the insured sought satisfaction from the insurance company. The Terry court found that the insurance company was not bound by the prior judgment against the uninsured motorist. Nevertheless, the resolution in Terry was to reverse the trial court's grant of summary judgment for the insured but affirm the denial of the insurance company's motion for summary judgment. Id. at 19, 495 S.E.2d at 72. Thus even under the significantly more compelling facts in Terry, the court did not find that the insurance company was entitled to judgment as a matter of law.

Here, in contrast to Terry, it appeared from the beginning of the Florida action that Bembow was an uninsured motorist. When Farm Bureau argued that the Florida trial court lacked personal jurisdiction over it, Ms. Sawyers consented to a voluntary dismissal of Farm Bureau. Crucially, that dismissal did not state that Farm Bureau would not be bound to any judgment against the uninsured motorist in the Florida suit, nor did it state that Farm Bureau reserved its right to defend on liability and damages at a later point. In further contrast to Terry, Ms. Sawyers did not reap the benefits of savings in a suit against a driver who appeared to be insured, nor was Ms. Sawyers afforded the ability to re-serve Farm Bureau at a later date without fear of a statute of limitations defense, which Farm Bureau has indeed raised.

In further support of its argument that it is not bound by the Florida judgment, Farm Bureau also cites to Vaught v. Dairyland Ins. Co., 131 Idaho 357, 956 P.2d 674 (1998). This case, too, is in no way binding precedent and is also distinguishable. In Vaught, the insureds brought suit against an uninsured motorist in federal court. While providing little detail, the Vaught court made clear that, in contrast to this case, the insureds not only did not join the insurance company as a party to the suit, they requested that the insurance company not intervene, making a strategic decision not to include the insurance company in the federal suit. Id. at 361, 956 P.2d at 678. Moreover, the Vaught court did not emphasize an avowed public policy similar to North Carolina's Motor Vehicle Safety and Financial Responsibility Act, which is intended "to compensate the innocent victims of financially irresponsible motorists" and is to be "liberally construed so that the beneficial purpose intended by its enactment may be accomplished." Sutton, 325 N.C. at 265, 382 S.E.2d at 763 (citations omitted).

In sum, viewing the evidence in the light most favorable to the non-moving party, Farm Bureau has failed to demonstrate that there is no genuine issue as to any material fact and that it is entitled to a judgment as a matter of law. We therefore reverse the trial court's granting Farm Bureau's motion for summary judgment.⁴

*191Ms. Sawyers also contends that the trial court erred in denying her motion for summary judgment. An order denying summary judgment is generally interlocutory, does not affect a substantial right, and is not immediately appealable. Nationwide Mut. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 122 N.C.App. 449, 456, 470 S.E.2d 556, 560 (1996) (citing Herndon v. Barrett, 101 N.C.App. 636, 639, 400 S.E.2d 767, 769 (1991)). Because the denial of Ms. Sawyer's motion for summary judgment is interlocutory and does not affect a substantial right, we refrain from addressing this argument on its merits and dismiss this assignment of error.

However, we note that as part of its argument regarding Ms. Sawyers' motion for summary judgment, Farm Bureau asserted that because Ms. Sawyers had already voluntarily dismissed claims against Farm Bureau twice, the case sub judice is barred under North Carolina General Statute section 1A-1, Rule 41(a). While we otherwise refrain from engaging the denial of Ms. Sawyers' motion for summary judgment because it is interlocutory, we briefly address this argument, which applies with equal force to Farm Bureau's argument that it was entitled to summary judgment.

Under Rule 41(a), a voluntary dismissal "operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court of this or any other state or of the United States, an action based on or including the same claim." N.C. Gen.Stat. § 1A-1, Rule 41(a) (2003).

Here, Ms. Sawyers' first suit was based in tort and arose from the automobile accident with Bembow. The first and second North Carolina actions were/are based in contract and unfair insurance practices and arose from Farm Bureau's failure to satisfy the Florida final judgment against Bembow. Because the Florida and North Carolina actions are not based on the same claim, this action is not barred. See, e.g., Richardson v. McCracken Enters., 126 N.C.App. 506, 509, 485 S.E.2d 844, 846-47 (1997), aff'd, 347 N.C. 660, 496 S.E.2d 380 (1998) (where the "asserted claims [are] based upon the same core of operative facts" and "all of the claims could have been asserted in the same cause of action," two previously dismissed actions were "based on or including the same claim" and the third action was barred under Rule 41(a)(1)); Centura Bank v. Winters, 159 N.C.App. 456, 459, 583 S.E.2d 723, 725 (2003) (same).

For the foregoing reasons, we reverse the trial court's grant of Farm Bureau's motion for summary judgment and dismiss as interlocutory the trial court's denial of Ms. Sawyers' motion for summary judgment.

Reversed in part, dismissed in part.

Judge HUDSON concurs.

Judge STEELMAN dissents.

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1. Farm Bureau has raised defenses related to service and naming of parties. However, for the purposes of Farm Bureau's motion for summary judgment only, Farm Bureau stipulated to proper naming.

5. It also contravened the provisions of N.C. Gen. Stat. § 20-279.21(b)(3)a, which provide that "the determination of whether a motorist is uninsured may be decided only by action against the insurer alone."

2. We note that, even under the terms of the insurance contract at issue here, Farm Bureau indicated its being bound by a judgment upon service of process: "Any judgment for damages arising out of a suit is not binding on us unless we have been served with a copy of the summons, complaint or other process against the uninsured motorist." The issue of whether service was properly effectuated in this case is not before us; we therefore do not address it.

3. Both Ms. Sawyers and Farm Bureau cite Reese v. Barbee, 129 N.C.App. 823, 501 S.E.2d 698 (1998), for this proposition. However, the Reese decision was affirmed by an evenly divided Supreme Court, which expressly stated that, while the Court of Appeals' decision was left undisturbed, it "stands without precedential value." Reese v. Barbee, 350 N.C. 60, 510 S.E.2d 374 (1999).

4. In its answer, Farm Bureau raised defenses that neither party addressed on appeal and that we therefore also do not address. See N.C. R.App. P. 28(a) ("The function of all briefs required or permitted by these rules is to define clearly the questions presented to the reviewing court and to present the arguments and authorities upon which the parties rely in support of their respective positions thereon.").