Newton v. Ohio Casualty Insurance

EAGLES, Judge.

Plaintiff attempts to bring this appeal as a declaratory judgment action to determine the maximum liability owed by Ohio Casualty and Hartford to plaintiff under their respective automobile liability policies. We find no present actual controversy sufficient to sustain jurisdiction under the Declaratory Judgment Act and, accordingly, we dismiss the appeal.

An actual controversy between adverse parties is a jurisdictional prerequisite for a declaratory judgment. Gaston Bd. of Realtors v. Harrison, 311 N.C. 230, 316 S.E. 2d 59 (1984). Provided an actual controversy exists, the liability of an insurance company pursuant to its insurance contract is properly the subject of a declaratory judgment. Ramsey v. Interstate Insurors, Inc., 89 N.C. App. 98, 365 S.E. 2d 172, disc. rev. denied, 322 N.C. 607, 370 S.E. 2d 248 (1988). Our case law, however, recognizes the difficulty in determining whether a justiciable controversy exists. Sharpe v. Park Newspapers of Lumberton, 317 N.C. 579, 347 S.E. 2d 25 (1986).

The Supreme Court in Sharpe stated that a justiciable controversy exists where “litigation appear[s] unavoidable.” Id. at 589, 347 S.E. 2d at 32. In determining when litigation is unavoidable, the Sharpe court quoted an earlier opinion which distinguished those certain and definite events which give rise to declaratory judgments from those “remote, contingent, and uncertain events that may never happen and upon which it would be improper to pass as operative facts.” (Emphasis in original.) Id. at 590, 347 S.E. 2d at 32 (quoting Consumers Power v. Power Co., 285 N.C. 434, 451, 206 S.E. 2d 178, 189 (1974)). We may also look to federal court decisions in determining the justiciability issue. Id. at 584, 347 S.E. 2d at 29.

In Bellefonte Reinsurance Co. v. Aetna Cas. and Sur. Co., 590 F. Supp. 187 (S.D.N.Y. 1984), plaintiffs, defendant’s reinsurers, instituted a declaratory judgment action pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. section 2201, to determine their rights and liabilities under various reinsurance contracts with defendant. Plaintiffs’ liability under the contracts, however, was predicated upon Aetna’s liability to its insured, which was unresolved at the time. The district court held that no “present and unconditional danger” had been shown, but rather the danger was “contingent upon the happening of certain future or hypothetical events.” Id. at 191. Because Aetna was not then liable to its insured, the court found that the action did not constitute an actual controversy and dismissed the case without prejudice.

Here the issue of liability has yet to be resolved. Ohio Casualty has presented defenses which could completely bar plaintiffs recovery. If Ohio Casualty was found not liable, an opinion here would be “a purely advisory opinion which the parties might . . . put on ice to be used if and when occasion might arise.” Tryon v. Power Co., 222 N.C. 200, 204, 22 S.E. 2d 450, 453 (1942). This we may not do.

In addition, should we not view this matter as a declaratory judgment action, the appeal still must be dismissed. All of the issues between all of the parties have not been decided and, therefore, this action is interlocutory and subject to dismissal. Waters v. Personnel, Inc., 294 N.C. 200, 240 S.E. 2d 338 (1978).

For the foregoing reasons we dismiss plaintiffs appeal.

Dismissed.

Judges ORR and Smith concur.