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North Carolina Farm Bureau Mutual Insurance Co. v. Edwards12/17/2002
PUBLISHED
This appeal arises out of an automobile accident that occurred on 15 April 1991 in Maryland between defendant Phillip Edwards and Mary Louise Haggenmaker. At the time of the accident, defendant Phillip Edwards was insured under a personal auto policy issued by plaintiff North Carolina Farm Bureau Mutual Insurance Company [Farm Bureau or plaintiff]. The policy contained underinsured motorist coverage in the amount of $100,000 per person for bodily injury and covered Phillip Edwards' four personal vehicles, including the 1974 Volvo he was driving at the time of the accident.
Phillip Edwards and his wife, Mary Edwards [defendants], filed suit against Haggenmaker for personal injuries and damages arising out of the accident. In May 1997, the Haggenmakers' liability insurance carrier, State Farm, offered defendants the policy limit of $100,000 to settle their claims against Haggenmaker. By letter dated 15 May 1997, Farm Bureau elected not to advance defendants the $100,000 policy limit and asked defendants to notify Farm Bureau if they intended to pursue additional claims.
On 16 August 1997, defendants accepted the $100,000 tender from the Haggenmakers and State Farm, and executed a "Release" [the Edwards Release or the Release] in consideration of the $100,000 payment. The Release stated, in pertinent part, with handwritten portions underlined and those portions marked-through stricken:
For the Sole Consideration of One hundred thousand dollars ($100,000) Dollars, the receipt and sufficiency whereof is hereby acknowledged, the undersigned hereby releases and forever discharges Harry H. Haggenmaker Mary Haggenmaker their heirs, executors, administrators, agents and assigns, and all other persons, firms or corporations liable or who might be claimed to be liable, none of whom do not admit any liability, from any and all claims, demands, actions, causes of action or suits of any kind or nature whatsoever, and particularly on account of all injuries, known and unknown, both to person and property, which have resulted or may in the future develop from an accident which occurred on or about April 15, 1991 at or near Old Crain Highway near School Lane.
Undersigned hereby declares that the terms of this settlement have been completely read and are fully understood and voluntarily accepted for the purpose of making a full and final compromise adjustment and settlement of any and all claims, disputed or otherwise, on account of the injuries and damages above mentioned, and for the express purpose of precluding forever and further or additional claims arising out of the aforesaid accident against the above named individuals.
After settling with Haggenmaker, defendant Phillip Edwards asserted a claim against Farm Bureau for benefits under his UIM coverage and demanded arbitration pursuant to the policy. From August 1997 to March 2000, the parties exchanged a series of correspondence regarding the legal implications of the Release, arbitration, and discovery prior to arbitration.
Ultimately, Farm Bureau denied Edwards' claim for UIM benefits under the policy based upon defendants' execution of the Release in favor of Haggenmaker and its interpretation of a recent amendment to the North Carolina Motor Vehicle Safety and Financial Responsibility Act [MVSFRA]. See N.C.G.S. ยง 20-279.21(b)(4).
Farm Bureau filed a declaratory judgment complaint on 22 March 2000 requesting that the trial court determine the rights of the parties under the Edwards' UIM policy and the Release and that the court stay arbitration pending that determination. Farm Bureau and defendants filed cross-motions for summary judgment. On 18 June 20
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