Opinion
No. COA10-711
Filed 21 June 2011 This case not for publication
Appeal by Plaintiff from order entered 5 April 2010 by Judge C. Phillip Ginn in Haywood County Superior Court. Heard in the Court of Appeals 1 December 2010.
Melrose, Seago Lay, P.A., by Mark R. Melrose and Agatha B. Guy, for Plaintiff-appellant. Yates, McLamb Weyher, L.L.P., by John T. Honeycutt, for Defendants-appellees.
Haywood County No. 08-CVS-1214.
Robert Davis argues he did not reject underinsured motorist insurance ("UIM") coverage and that his insurance agent was negligent in failing to give him the opportunity to reject UIM coverage. Therefore, Mr. Davis contends, the trial court erred in granting summary judgment in favor of his insurer and his insurance agent. We disagree and therefore affirm.
I. Factual and Procedural Background
In November of 2007, Mr. Davis was riding with his wife, Velda Davis, in the couple's car when Mrs. Davis pulled out in front of another vehicle at a stop sign. Mr. Davis was injured in the resulting accident, which was determined to be Mrs. Davis's fault. State Farm Mutual Automobile Insurance Company ("State Farm"), Mr. Davis's insurer, paid him $50,000 under his policy. That amount was insufficient to cover his medical expenses. Mr. Davis filed a complaint seeking a declaratory judgment that State Farm must provide him up to $1,000,000 in UIM coverage because Mr. Davis never signed a statutory UIM coverage rejection-selection form. (Under the law in effect at the time, when an individual is deprived of an opportunity to reject or select UIM coverage he is entitled to up to $1,000,000 in UIM coverage. See infra Part III.) Mr. Davis also sought relief from Lee Starnes, a State Farm insurance agent, alleging Mr. Starns negligently failed to give Mr. Davis an opportunity to reject or select UIM insurance.
Mr. Davis's policy, as it existed at the time of the accident, provided liability coverage of $50,000 per person. He was the sole named insured under the policy. Mrs. Davis qualified as an insured under the policy as the named insured's spouse. According to a State Farm employee, State Farm mailed Mr. Davis a form indicating he could obtain UIM coverage up to $1,000,000. Mr. Davis never signed a rejection-selection form, but the record indicates Mrs. Davis signed two. She first signed her name on such a form in September of 2001. This form lists the "Named Insured" as "Davis, Robert Velda." There is a check mark next to the language, "I choose to reject Combined Uninsured/Underinsured Motorists Coverage and select Uninsured Motorist Coverage" at limits of "30/60" for bodily injury and "25" for property damage.
In May of 2008, after the accident, Mrs. Davis modified the terms of the insurance policy and signed another rejection-selection form using her name. Again, the form lists the "Named Insured" as "Davis, Robert Velda," and indicates the couple selected "Combined Uninsured/Underinsured Motorists Coverage at limits of" "250/500" for bodily injury and "100" for property damage. Mrs. Davis was added as a "named-insured" at this time, and liability limits were increased to $250,000 per person and $500,000 per accident.
Mr. Starnes has been Mr. Davis's insurance agent for over twenty years. Over those twenty years, Mr. Starnes and employees at his insurance agency primarily dealt with Mrs. Davis concerning all of the family's insurance needs. More often than not, it was Mrs. Davis who called when Mr. Davis's insurance policy needed to be adjusted. For example, Mrs. Davis has contacted the agency to add their son to the policy as a listed driver and added names of lienholders to the policy. Mrs. Davis contacted the insurance agency to modify the policy when the couple purchased or sold a vehicle.
When deposed, Mr. Davis stated that he and Mrs. Davis would discuss changes to his insurance policy before Mrs. Davis made the changes. Mr. Davis was asked the following question: "So am I correct that if your wife in times past had requested a change in your policy, that would have been done usually with your knowledge or approval?" Mr. Davis replied in the affirmative. He also stated that he did not recall specifically authorizing or discussing the 2001 insurance policy changes. Mrs. Davis indicated she did not remember signing the rejection-selection form, but did not deny signing it either. At no point did Mr. Davis inform anyone at the agency that his wife could not make changes to his insurance policy.
The trial court granted both Defendants' motions for summary judgment. Mr. Davis timely appealed.
II. Jurisdiction
We have jurisdiction over Mr. Davis's appeal of right. See N.C. Gen. Stat. § 7A-27(b) (2009) (stating appeal lies of right to this Court from final judgments of a superior court).
III. Analysis
Summary judgment is proper in a declaratory judgment action where "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." N.C. R. Civ. P. 56(c). The moving party has the burden of demonstrating there is no genuine issue of material fact. Perry v. Presbyterian Hosp., N.C. App. ___, ___, 703 S.E.2d 850, 853 (2011). The evidence is to be construed in the light most favorable to the non-moving party. Id. We review a trial court's summary judgment decision de novo. Id.
This appeal relates to section 20-279.21 of the North Carolina General Statutes as it existed prior to 1 January 2009. The pre-amendment version of subsection 20-279.21(b)(4) stated that, "if the named insured does not reject underinsured motorist coverage and does not select different coverage limits, the amount of underinsured motorist coverage shall be equal to the highest limit of bodily injury liability coverage for any one vehicle in the policy." N.C. Gen. Stat. § 20-279.21(b)(4) (2007). However, when the insurer fails to give the insured "the opportunity to reject or select different UIM coverage limits" the policy provides UIM coverage with limits of $1,000,000 per person and $1,000,000 per accident. See Nationwide Mut. Ins. Co. v. Burgdoff, N.C. App. ___, ___, 698 S.E.2d 500, 502-04 (2010) (resolving the tension between State Farm Mut. Auto. Ins. Co. v. Fortin, 350 N.C. 264, 513 S.E.2d 782 (1999), and Williams v. Nationwide Mut. Ins. Co., 174 N.C. App. 601, 621 S.E.2d 644 (2005)).
Mr. Davis argues he is not bound by his wife's rejection of UIM coverage. We disagree.
An agent's power to bind the principal includes "not only the authority actually conferred, but the authority implied as usual and necessary to the proper performance of the work" entrusted to the agent. Powell Powell v. King Lumber Co., 168 N.C. 632, 635, 84 S.E. 1032, 1033 (1915) . Typically, the issue of agency is a question of fact for the jury. Vares v. Vares, 154 N.C. App. 83, 87, 517 S.E.2d 612, 615 (2002). However, "`[i]f only one inference can be drawn from the facts then it is a question of law for the trial court.'" Id. (quoting Hylton v. Koontz, 138 N.C. App. 629, 635, 532 S.E.2d 252, 257 (2000) (alteration in original). We reject Mr. Davis's argument that agency principles do not allow Mrs. Davis to bind him even though she is not listed as the "named insured" on policy documents other than the selection-rejection form. When a named insured's agent rejects UIM coverage on his behalf, that rejection is imputed to the named insured. Cf. Allstate Ins. Co. v. Estate of Hancock, 545 S.E.2d 845, 848 n. 4 (S.C. Ct. App. 2001) ("Although not argued in the appeal before us, we note that it may be possible for a spouse to reject UIM coverage if he or she does so as an agent authorized to act on the applicant's behalf."). Mr. Davis stated that when changes were made to the policy they were "usually" done with his "knowledge and approval." This indicates Mrs. Davis did not require explicit permission to make each change to Mr. Davis's policy. We conclude that, as a matter of law, Mrs. Davis had implied authority to reject UIM coverage because Mr. Davis had authorized her to perform insurance transactions on his behalf. We also believe it was clear that, while she signed her own name, Mrs. Davis was acting on Mr. Davis's behalf.
We now turn to Mr. Davis's negligence suit against his insurance agent, Mr. Starnes. Mr. Davis argues that, because Mr. Starnes failed to give Mr. Davis an opportunity to reject or select UIM coverage, the trial court incorrectly granted Mr. Starnes' motion for summary judgment and failed to grant Mr. Davis's motion for summary judgment. We disagree. Because Mrs. Davis served as Mr. Davis's agent when she rejected UIM coverage on his behalf, see supra, it follows that Mr. Davis was presented with the opportunity to select or reject UIM coverage. Therefore, Mr. Davis's argument is without merit.
Defendants argue an insurance agent has no duty under negligence law to provide his clients with an opportunity to select or reject UIM coverage. We do not reach and express no opinion on this issue.
Affirmed.
Judges GEER and STEPHENS concur.
Report per rule 30(e).