Recent North Carolina Decisions

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Recent North CarolinaDecisions

• J. Donald Cowan, Jr.
• Smith Moore LLP
• 17 June 2004

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LIABILITY
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Motor Vehicles
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Pintacuda v. Zuckeberg (N.C. 2004) (1)
Issue Whether independent conduct of
plaintiff relieved defendants negligence of
stopping suddenly on interstate?
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FACTS

• Plaintiff, on motorcycle, following defendant on
  I-240
• Plaintiff traveling under speed limit and several
  car lengths behind defendant
• As plaintiff crested hill, saw defendant stopped
  instantaneously in the plaintiffs travel lane
• Plaintiff applied brakes, swerved into adjoining
  lane to avoid defendants vehicle

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FACTS (Contd.)

• Plaintiff testified that he skidded on something
  or hit reflector marker
• Trial court grants defendants motion for summary
  judgment
• Court of Appeals reverses because jury question
  as to whether plaintiffs skidding was
  foreseeable when defendant stopped

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HELD Summary judgment for defendant affirmed.

1. When plaintiff becomes aware of potential danger
   created by negligence of another, then by
   plaintiffs independent act of negligence, causes
   the accident, the defendant is relieved of
   liability
2. Responsibility for the accident was the
   plaintiffs skidding on something or hitting the
   reflector marker
3. Plaintiff was aware of the defendant stopping and
   had sufficient time to brake, see that the
   adjoining lane was clear and began to move to
   adjoining lane

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Overton v. Purvis (N.C. 2003) (2)
Issue When plaintiff stood in the
defendants lane of travel attempting to get the
defendant to slow down because of conditions on
the road, whether the defendant had the last
clear chance to avoid striking the plaintiff?
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FACTS

• As dogs involved in fox hunt crossed highway,
  plaintiff stood in the road to get traffic to
  slow down
• Defendant approached the hunt crossing
• When the defendant did not slow down, the
  plaintiff ran to opposite lane of travel where he
  was struck by the defendant who swerved to avoid
  hitting the plaintiff
• Jury found negligence and contributory
  negligence, but concluded that the defendant had
  the last clear chance to avoid the accident
• Court of Appeals held it was error to instruct on
  last clear chance

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HELD Trial court correctly instructed on last
clear chance.

1. Since lighting and visibility good, plaintiff
   acted reasonably in remaining in the defendants
   travel lane and attempting to get the defendants
   attention
2. Because defendant was not keeping a proper
   lookout, he did not notice the plaintiff until it
   was too late
3. If defendant had stayed in his lane of travel, he
   could have avoided the accident
4. By keeping a proper lookout, the defendant would
   have seen the plaintiff sooner and had the times
   and means to avoid hitting the plaintiff

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Overton v. Purvis (N.C. App. 2004) (4)
Issue Whether the trial court properly
refused to instruct on sudden emergency?
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HELD Sudden emergency instruction properly
refused.

1. Defendant testified that he saw the hunters
   vehicles parked along the side of the road and
   also saw the plaintiff in the road waving his
   arms
2. Defendant could have stopped, but did not
3. Defendant failed to establish element of sudden
   emergency that emergency was not created by his
   own negligence

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Headley v. Williams, review denied (N.C.App.
2004) (6)

• Issue
• Whether trial court correctly granted defendants
  motion for directed verdict when decedent
  collided with defendants vehicle and physical
  evidence showed that accident occurred in
  decedents lane of travel?
• Whether findings of fact and conclusions of law
  should be made when trial court bifurcates
  liability and damages?

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FACTS

• Decedent, operating motorcycle, rounds curve in
  road and collides with defendants vehicle
• No witnesses to accident other than defendant
• Witness had been following decedents motorcycle
  and testified that decedent was operating within
  speed limit and in normal manner
• Investigating highway patrolman testified that
  gouge marks in decedents lane of travel
• Defendants drivers license restricted operation
  of vehicle to wearing corrective lenses no
  contacts or glasses worn by defendant when
  patrolman arrived on scene
• Trial court grants defendants motion for a
  directed verdict

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HELD Directed verdict reversed.

• Taking evidence in light most favorable to
  plaintiff
• collision occurred in decedents lane of travel
  and
• no evidence that defendant wearing corrective
  lenses
• Although decision to bifurcate liability and
  damages is in discretion of trial court, trial
  court should consider making findings of fact and
  conclusions of law which clearly establish that
  severance is appropriate

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Dunn v. Custer (N.C.App. 2004) (7)

• Issue
• When plaintiff had just begun a second, part-time
  employment, whether plaintiffs economists
  opinions were too speculative and improperly
  utilized opportunity cost?
• Whether passenger in vehicle in which plaintiff
  was injured was improperly permitted to testify
  as to effect of impact on passengers injuries?

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FACTS

• Plaintiff, a licensed dentist, had just begun
  working part-time for Dr. Teague at the time of
  the accident and had received his first pay check
  of 1,200 the day before the accident
• The plaintiffs economic expert, Dr. Shirley
  Browning, testified that the plaintiff would not
  have left his employment with the County Health
  Department for a lesser-paying job, thus using
  the Health Department salary and opportunity
  cost to reach his opinion.
• The defendant admitted liability
• Dr. Teague was a passenger in the plaintiffs car
  and was permitted over objection to testify about
  the force of impact and injuries he received in
  the accident. The jury awarded the plaintiff
  310,000.

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HELD

1. Testimony of economic expert properly admitted.
   Defendant did not challenge Dr. Brownings
   methodology. Dr. Browning properly assumed that
   the plaintiff would not leave the Health
   Department for a lesser-paying job.
2. The admission of evidence of injuries by an
   occupant in the vehicle is in the discretion of
   the trial court. Although opposite result of
   excluding evidence of occupants injuries was
   affirmed in Griffis v. Lazaronich (N.C.App.2003),
   the defendant in the present case did not show
   abuse of discretion by the trial judge.

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Sharp v. CSX Transportation(N.C.App. 2003) (10)
Issue Whether decedents driving around
railroad crossing gates in violation of statute
was grounds for contributory negligence as a
matter of law and grant of defendants 12 (b) (6)
motion?
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HELD

1. G.S. 20-142.1 prohibits a person from driving
   around a crossing gate, but also provides that
   violation of statute shall not constitute
   negligence per se
2. Since violation of statute would not establish
   contributory negligence per se, error to grant
   defendants 12 (b) (6) motion

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Williams v. Davis (N.C.App. 2003) (11)
ISSUE Whether defendants motion for
directed verdict properly granted when
plaintiffs evidence showed that defendants
headlights were not on at time of collision at
night?
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FACTS

• Plaintiff was entering University Parkway from
  Holiday Inn in Winston-Salem at 930 p.m. when
  struck by defendants vehicle.
• Plaintiff testified that she looked right and
  left before entering road.
• Plaintiffs evidence showed that defendants
  headlights were not on at time of collision.
• Plaintiffs evidence also showed that defendant
  traveling in excess of posted speed of 45 mph.

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FACTS (Contd.)

• Defendants vehicle entering University Parkway
  from exit ramp.
• Area in which collision occurred was heavily
  commercialized with large car dealerships lit up
  like a Christmas tree.
• Trial Court grants defendants motion for
  directed verdict based on plaintiffs
  contributory negligence.

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HELD Affirmed.

1. Even though plaintiff testified that she looked
   left and right before entering the Parkway, she
   failed to look at the exit ramp.
2. Although defendants headlights may not have been
   on, there was sufficient light for the plaintiff
   to see the defendants vehicle approaching.
3. Plaintiff pulled into the Parkway when a
   reasonable person should have seen it was unsafe
   to enter the intersection.

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Horne v. Vassey (N.C.App. 2003) (12)
ISSUE Whether trial judge properly denied
plaintiffs motion for a new trial when
plaintiffs evidence showed that defendant struck
plaintiffs vehicle from the rear and plaintiff
incurred 9,005 in medical bills as a result of
injuries received from the accident and jury
awarded no damages?
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FACTS

• Defendant struck plaintiffs vehicle from the
  rear.
• Plaintiffs treating neurologist, Dr. Maier,
  testified that plaintiff had a 10 permanent
  disability to her entire body as a result of the
  accident.
• Plaintiff introduced evidence of 9,005 in
  medical bills incurred as a result of the
  accident.
• Plaintiff had numerous medical problems before
  the accident, including chronic pain syndrome.

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FACTS

• During defendants cross-examination of
  plaintiff, plaintiff identified four photographs
  of her vehicle that were taken the day after the
  accident.
• Plaintiff disputed the photographs, contending
  there was more damage to the rear of her vehicle
  than shown on the photographs. She admitted that
  the photographs were taken before her car was
  repaired.
• The jury awarded no damages. The trial judge
  denied the plaintiffs motion for a new trial.

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HELD Affirmed.

• Photographs properly admitted by the trial court
• Testimony that the exhibit is a fair and
  accurate portrayal of the scene at the time of
  the accident is ordinarily sufficient to
  authenticate the exhibit.
• Although plaintiff disputed the accuracy of the
  photographs as showing all of the damage to her
  vehicle, this was an issue of the weight of the
  photographs for the jury and did not relate to
  the admissibility of the photographs.

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HELD Affirmed. (Contd.)

• Motion for new trial properly denied.
• Even though the defendant did not present expert
  medical testimony, the defendants
  cross-examination of the plaintiffs medical
  expert, Dr. Maier, produced Dr. Maiers opinion
  that it would be very hard to sustain a
  significant injury from an impact by the
  defendants vehicle traveling at a speed of five
  miles per hour.
• The defendant testified that his vehicle was
  traveling at no more than one to two miles per
  hour when he rolled into the plaintiffs
  vehicle.
• Additional cross-examination indicated that the
  plaintiff had a multitude of pre-existing
  medical problems.
• Credibility of the evidence is for the jury.
• It was well within the jurys power to minimize
  or wholly disregard the testimony given by Dr.
  Maier.

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Premises
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Barringer v. Mid Pines Development Group (N.C.
2003) (14-15)

• ISSUES
• 1. Whether trial court properly denied
  plaintiffs requested jury instruction that
  plaintiff is not contributorily negligent when
  plaintiffs attention is diverted from seeing an
  existing dangerous condition?
• 2. Whether the trial court properly admitted
  testimony about the interpretation of the
  plaintiffs MMPI when the doctor interpreting the
  MMPI did not testify?

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FACTS

• Plaintiff is attending employment-related
  workshop at Mid Pines.
• Buffet lunch provided at the Inn.
• Plaintiff had been to the buffet table to make a
  sandwich and salad.
• Plaintiff returns to the buffet table, and, as
  returning to his table, he trips over electrical
  cord connecting warming pot to electrical outlet.
• Trial court denies plaintiffs request for jury
  instruction that plaintiff is not contributorily
  negligent when his attention is diverted from
  discovering or seeing an existing dangerous
  condition.

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FACTS

• Jury finds plaintiff contributorily negligent and
  does not award damages.
• Court of Appeals reverses on basis that requested
  jury instruction should have been given.

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HELD Trial court affirmed.

• Requested jury instruction by plaintiff properly
  denied.
• Doctrine of diverted attention has not been
  adopted in North Carolina.
• Pattern jury instruction on negligence includes
  the duty of ordinary care in varying
  circumstances. Thus, when jury instructed that a
  party must act as an ordinary prudent person
  under the circumstances, this is sufficient
  statement of duties.
• The jury may not ignore or fail to apply
  contributory negligence as requested by the
  plaintiff.

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HELD Trial court affirmed. (Contd.)

• MMPI properly admitted.
• Dr. Edmundson, the plaintiffs primary treating
  physician, was cross-examined by the defense
  about the plaintiffs MMPI and the
  interpretation of the MMPI by Dr. Crovitz, a
  non-testifying witness.
• The Court of Appeals held that it was error to
  admit the testimony because there was no
  evidence that the test was properly
  administered and the MMPI was admitted for the
  truth of the matters in the test.

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HELD Trial court affirmed. (Contd.)

• MMPI properly admitted. (Contd.)
• The Supreme Court held that the test was
  properly admissible under Rule 803(6).
• There was evidence at trial that the record was
  made at or near the time of evaluation that the
  results were created by a person with knowledge
  and that the record was kept in the ordinary
  course of business.
• The plaintiff was given the opportunity to
  depose Dr. Crovitz, but declined.

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Nelson v. Novant Health Triad Region (N.C.App.
2003) (17)
ISSUE Whether trial court properly denied
defendants motion for directed verdict when
plaintiff testified that she was looking ahead of
her and did not see that the floor where she was
walking was slippery from water?
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FACTS

• Plaintiff was at Forsyth Memorial Hospital as
  part of her employment.
• She was walking down a hall past the hospitals
  dishwashing area.
• Food trays and carts were across the hall as she
  walked through the area.
• She testified that the floor was shiny and
  buffed and had a glassy appearance.
• She slipped and fell and injured her right knee.
• The trial court denied the defendants motion for
  directed verdict. The jury awarded the plaintiff
  14,500.

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HELD Affirmed.

1. Plaintiff testified that she was not aware of the
   slippery condition of the floor and that the film
   of water on the floor would have been impossible
   to see because of the shiny linoleum floor.
2. Therefore, the dangerous condition was not open
   and obvious as a matter of law.
3. The decision of the plaintiff to look ahead and
   avoid the food trays and carts rather than look
   down at the floor was a question of fact for the
   jury.

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Clontz v. St. Marks Evangelical Lutheran
(N.C.App. 2003) review denied (19)
ISSUE Whether operation of equipment on land
is sufficient basis for premises liability?
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FACTS

• The plaintiff was participating in the churchs
  annual Halloween festival held on Allen Sloops
  farm.
• As guests at the festival were being pulled
  through the woods by a tractor-trailer, the
  plaintiff came out of the woods to make scary
  noises.
• The plaintiff noticed that one of the children on
  the trailer appeared to be falling off. When the
  plaintiff attempted to assist the child, the
  plaintiff was pulled under the trailer and was
  injured.
• The trial court granted the 12(b)(6) motions of
  the Church and Allen Sloop, but denied similar
  motions by Harry Sloop, the operator of the
  tractor-trailer.

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HELD Affirmed.

• Even though appeals of the church and Allen
  Sloop were interlocutory, because the claim
  against Harry Sloop was still in the trial
  court, it affected a substantial right.
• A substantial right is affected because of the
  right of the parties to try all issues before
  the same jury as well as the right to avoid
  inconsistent verdicts in separate trials.

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HELD Affirmed. (Contd.)

• The premises liability claims against the church
  and Allen Sloop were properly dismissed.
• The claims related only to the operation of the
  tractor-trailer.
• Hazards relating only to an activity . . .
  apart from the condition or maintenance of the
  property do not give rise to a claim for premises
  liability.
• Allegations involving the applicability of the
  motor vehicle laws in the operation of the
  tractor-trailer did not apply because the
  operation was on the Sloop farm, therefore, they
  were not governed by the motor vehicle statutes.

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INSURANCE
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Motor Vehicles
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State Farm Fire and Casualty Co. v. Darsie,
review denied (N.C.App. 2003) (21)

• Issues
• Whether allegation of fraud in amended
  counterclaim related back to time original
  counterclaim filed?
• Whether the insured was on notice of the alleged
  fraud more than three years before the
  counterclaim was filed?

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FACTS

• Mr. and Mrs. Leinfelders had been insured by
  State Farm since 1984
• At suggestion of agent, Mr. High, for check-up
  of coverage, automobile limits were reduced from
  500,000/person to 100,000/300,000 and separate
  1 million umbrella policy was purchased.
  Umbrella policy had intra-family exclusion of
  claim against insured by spouse or named insured.
• Leinfelders involved in accident on 29 October
  1996 in which Mr. Leinfelder was killed and Mrs.
  Leinfelder received serious injuries and medical
  bills over 500,000
• The accident was caused by the negligence of Mr.
  Leinfelder
• Mrs. Leinfelders sued her husbands estate on 5
  October 1999

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FACTS (Contd.)

• State Farm filed declaratory judgment action on 4
  March 2000 contending that no coverage under
  umbrella policy and limits of 100,000 under
  automobile policy
• On 8 March 2000, Mrs. Leinfelder counterclaimed
  in the declaratory judgment action
• (1) denying that coverage under automobile
  policy was limited and
• (2) alleging intra-family exclusion void as
  against public policy
• Mrs. Leinfelder allowed to amend counterclaim on
  10 May2001 to allege fraud and equitable estoppel
• Trial court sitting without jury
• (1) intra-family exclusion applied
• (2) statue of limitations on claims alleging
  fraud had not run
• (3) Mrs. Leinfelder entitled to reformation of
  umbrella policy

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HELD Reversed.

1. Statute of limitations on fraud had run at the
   time Mrs. Leinfelder was allowed to amend her
   counterclaim on 10 May 2001. Amended
   counterclaim allegations of fraud did not relate
   back to original filing of counterclaim on 8
   March 2000. The original counterclaim did not
   contain sufficient factual allegations about the
   transactions to put State Farm on notice of the
   later-alleged fraud. Fraud is required to be
   alleged specifically.
2. Statute of limitations on fraud was not tolled
   during three years before complaint was filed no
   equitable estoppel. Since statute of limitations
   was raised as a defense, the burden was on Mrs.
   Leinfelder to excuse the statutory bar. We
   hold as a matter of law that an otherwise
   reasonable time to discover fraud or
   misrepresentation in the PLUP policy was when the
   policy itself required certain claims, such as an
   accident, be brought to the attention of the
   insurer for the purposes of determining coverage.

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HELD Reversed. (Contd.)

• (Contd.) Mrs. Leinfelder was charged was
  discovery of the fraud at least sometime within
  a year of the accident. She should have
  discovered the fraud by 29 October 1997-one year
  after the accident and more than three years
  before the amended counterclaim on 10 May 2001.

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UM/UIM
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Purcell v. Downey (N.C.App. 2004) (25)
Issue Whether plaintiff/insured was entitled
to stack or aggregate two UIM policies?
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FACTS

• Accident on 29 June 1997 when plaintiffs injured
  as a result of their motorcycle being struck by
  vehicle operated by Downey
• Downeys liability carrier pays limits of
  100,000 to each plaintiff
• Plaintiffs have two automobile insurance policies
  with State Farm with UIM limits of
• (1) 100,000/300,000 and
• (2) 25,000/50,000
• Trial court ruled that stacking available thus,
  plaintiffs entitled to coverage of 125,000/
  350,000 and additional payment of 25,000 each

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HELD Reversed. No stacking.

• Policy 2 had the minimum limits, thus no UIM
  coverage available and no stacking

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Polk v. Andrews,review denied (N.C. App. 2003)
(26)
Issue Whether insured required to serve
uninsured carrier within statute of limitations
for underlying accident?
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FACTS

• Decedent was a passenger in Polks vehicle when
  it was struck by truck operated by Andrews on 12
  April 2000
• Polk and his vehicle uninsured
• The decedent died as a result of injuries
  received in the accident
• Suit filed on 8 December 2000 against Andrews and
  Polk

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FACTS (Contd.)

• On 12 June 2002, plaintiff sent notice to
  Atlantic Insurance Company, the uninsured carrier
  for the decedent, giving notice of the suit and
  seeking UM benefits
• On 28 June 2002, Atlantic Insurance filed motion
  to dismiss for lack of jurisdiction,
  insufficiency of process and expiration of the
  statute of limitations
• Atlantic was served with a copy of the summons
  and complaint on 3 July 2002
• The trial court dismissed the action as to
  Atlantic

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HELD Affirmed.

• G.S. 20-279.21 (b) (3) a requires that UM
  carriers be served with a copy of the summons and
  complaint within the statute of limitations for
  the underlying tort

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Register v. White,review granted (N.C.App. 2003)
(28)
Issue Whether the time to demand arbitration
pursuant to underinsurance policy ran from the
time of the underlying tort or from the time the
torfeasors liability carrier paid its limit?
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FACTS

• Plaintiff was injured in accident on 30 June 1998
  while riding as a passenger in vehicle operated
  by White. Suit filed against White.
• On 8 August 2001, Whites liability carrier
  tendered its full limit of 50,000
• On 24 September 2001, the plaintiff demanded
  arbitration with her underinsured motorist
  carrier, Farm Bureau
• Trial court denied motion by plaintiff to compel
  arbitration on grounds that motion untimely and
  had been waived by plaintiffs conduct during the
  litigation

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HELD Reversed. Right to demand arbitration did
not arise until liability carrier paid its limits.

• Although Farm Bureau policy stated that demand
  for arbitration must be made within limitation
  period for underlying tort, G.S. 20-279.21 (b)
  (4) states that insured may seek UIM coverage
  only after liability carrier has paid it limits.
• Similarly, plaintiffs conduct in the litigation
  did not waive the right to arbitration. It was
  necessary for the plaintiff to litigate against
  the liability carrier to pursue her rights to
  payment. Once the liability carrier paid its
  limits, the plaintiff ceased litigation and
  demanded arbitration.

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Austin v. Midgett (N.C.App. 2003) (29)
ISSUE Whether UIM carriers were entitled to
credit for payment of workers compensation
benefits which are not subject to an employers
lien?
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FACTS

• Automobile accident on 25 October 2000 in which
  Austin was killed when his vehicle struck by
  vehicle operated by Midgett.
• At the time of the accident, Austin was in the
  course and scope of his employment with NC DOT.
• Midgett insured by Farm Bureau with limits of
  50,000.
• Austin covered by two UIM policies, one by
  Integon and the other by State Farm. Both UIM
  policies had limits of 100,000 per person.
• Workers compensation benefits of 100,278.98
  were paid to Austins estate.

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FACTS (Contd.)

• Austins estate and NC DOT compromised
  compensation lien with DOT agreeing to accept
  33,426 in satisfaction of lien.
• Midgetts liability carrier paid limits of
  50,000.
• The parties stipulated that Midgetts negligence
  was the sole cause of Austins death and that
  damages sustained by Austin estate were in excess
  of 200,000.

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HELD Reversed and Remanded.

1. UIM policies did not exclude payment of
   prejudgment interest from compensatory damages.
   But, since limit of liability of UIM carriers was
   75,000, UIM carriers could not be required to
   pay prejudgment interest in excess of 75,000.
2. UIM policies stated that any amounts payable
   would be reduced by sums payable under workers
   compensation law.
3. G.S. 20-279.21(e) required UIM carrier to pay
   both amount of workers compensation lien and any
   loss not compensated by workers compensation.

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HELD Reversed and Remanded. (Contd.)

• UIM carriers were, therefore, responsible for
  33,426 (the amount of the compromised
  compensation lien) plus the loss not compensated
  by workers compensation.
• The Court of Appeals held that
• --the amount of the uncompensated loss was
  200,000
• --LESS the amount of workers compensation
  benefits paid of 100,278.98
• --EQUALING 99,721.01
• --PLUS the compensation lien of 33,426
• --TOTALING 133,147.02

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HELD Reversed and Remanded. (Contd.)

• Since the Integon policy had an other insurance
  clause and Integons limit of liability of
  100,000 was one-half of the 200,000 aggregate
  liability, Integon was responsible for one-half
  of the loss.
• One half of the total of 133,147.02 is
  66,573.51 for each UIM carrier.
• Since both UIM carriers are entitled to credit of
  25,000, one-half of the payment by Midgetts
  liability carrier, both UIM carriers are required
  to pay
• --66,573.52
• --PLUS prejudgment interest up to the 75,000
  limit

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Erie Insurance Exchange v. Miller(N.C.App. 2003)
(33)
HELD
Even though the Erie application for insurance
form contained the exact language required by
G.S. 20-279.21 for rejection of UM/UIM
coverage, the insured did not effectively reject
UM/UIM coverage on the Erie application because
the Erie application form was not one that had
been promulgated by the Bureau and approved by
the Commissioner of Insurance.
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Farm Bureau Insurance Company of N.C., Inc. v.
Blong (N.C.App. 2003)review denied (34)
ISSUE Whether UIM carrier making payments
under policy is subrogated to other amounts
payable to the UIM insured?
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FACTS

• Automobile accident on 6 April 1999 in which
  vehicle operated by Ms. Marvin strikes vehicle in
  which Ms. Blong and others are passengers.
• Ms. Marvin had been drinking at two bars before
  accident. Immediately after the accident, her
  blood alcohol level is .21.
• Ms. Marvins liability carrier pays its limits of
  50,000 to all occupants of the Blong vehicle.
• One of passengers in Blong vehicle, Ms. Lawler,
  had UIM insurance with Farm Bureau with limits of
  100,000/300,000.

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FACTS (Contd.)

• Farm Bureau paid its limits of 250,00 to the
  occupants of the Blong vehicle.
• The occupants of the Blong vehicle filed two
  separate dram shop suits against the bars
  providing alcohol to Ms. Marvin. These suits
  were settled through court-ordered mediation.
• Farm Bureau filed the present action to be
  subrogated to the amounts paid as a result of the
  suits against the bars.

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FACTS (Contd.)

• Trial Court entered judgment for Farm Bureau
• 1. Subrogating it to dram shop recoveries and
• 2. Requiring Farm Bureau to pay percentage of
  recovery to attorneys for occupants of Blong
  vehicle.

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HELD Affirmed.

1. UIM provisions of G.S. 20-279.21(b)(4) make
   uninsured section of G.S. 20-279.21(b)(3)
   applicable to UIM claims.
2. (b)(3) provides that insurer making payments is
   entitled to proceeds of any settlement relating
   to injury for which payment was made.
3. The UIM policy and the Financial Responsibility
   Act allow subrogation of the dram shop
   recoveries.
4. Trial court properly required Farm Bureau to pay
   percentage of recovery to attorneys for occupants
   of Blong vehicle.

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Espino v. Allstate Indemnity Co.(N.C.App. 2003)
(36)
ISSUE Whether UIM carrier entitled to credit
for payments made under medical payments coverage?
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FACTS

• Automobile accident on 19 October 1999 in which
  Allstate insured, Espino, injured by vehicle
  driven by uninsured motorist.
• The UIM provisions of Allstate policy stated that
  Allstate would pay reasonable medical expenses,
  but that this coverage was excess over and shall
  not duplicate any amount payable under the
  medical payments coverage.
• Allstate paid 1,000 pursuant to medical payments
  coverage.
• UIM dispute was decided by arbitrator who awarded
  9,000 in medical expenses.
• Allstate paid 8,000, taking credit for 1,000
  paid under medical payments coverage.
• Trial court ordered Allstate to pay full 9,000
  awarded by arbitrator on basis that Allstate
  policy violated collateral source rule.

75
76
HELD Reversed.

1. Medical payments coverage is not required by
   statute and is not contained in Financial
   Responsibility Act.
2. Relationship between the parties is, therefore,
   governed by the policy. Policy allows credit for
   medical payments on amount owed under UIM
   provisions.

76
77
Monin v. Peerless Insurance Co.(N.C.App.
2003)review denied (38)
HELD
Where issue for jury in claim for uninsured
benefits was whether plaintiff was a resident of
his fathers household at the time of the
accident, error for trial court to set aside jury
verdict in favor of Peerless when there was more
than a scintilla of evidence that plaintiff did
not reside at fathers residence.
77
78
Unfair and Deceptive Practices
78
79
Cullen v. Valley Forge Life Ins. Co.,review
denied (N.C.App. 2003) (39)
Issue When insurance company accepts premium
with knowledge of pre-existing health condition,
then sends letter to insured revoking policy
based on insureds concealment of pre-existing
health condition, whether such conduct
constitutes unfair and deceptive insurance
practices?
79
80
FACTS

• Cullen applied for 1 million policy and
  identified on the application that he had skin
  disorders and Crohns disease
• The application was approved
• The insurance agent solicited Cullen for
  additional coverage and presented a plan for an
  additional 500,000 policy
• The application was completed on 2 April 1999
• Because a premium was not required with the
  application, the policy stated that the policy
  would not become effective until the first
  premium was paid
• On 14 April 1999, Cullen completed a required
  medical exam for the policy

80
81
FACTS (Contd.)

• The policy was approved on 19 May 1999
• On 26 May 1999, Cullen was seen by his regular
  physician who told Cullen that he had a form of
  skin cancer on his back
• On 11 June 1999, the insurance company received
  the first premium payment
• Cullen submitted a second application for
  insurance, and, as part of the application, he
  received a medical examination and submitted a
  medical history supplement on 14 June 1999 that
  identified the melanoma

81
82
FACTS (Contd.)

• The insurance company deposited the first premium
  check on 17 June 1999
• On 8 July 1999, the insurance company complied
  with Cullens request for a change of beneficiary
• On 21 September 1999, the insurance company wrote
  Cullen and told him that his second application
  for insurance had been denied because of
  violation of the good health provision of the
  policy, that the initial policy never went into
  effect and refunded the premium payment
• The trial court granted Cullens motion for
  summary judgment and awarded 2.2 million for
  breach of contract and unfair and deceptive
  practices

82
83
HELD Affirmed.

• Valley Force had waived the right to enforce the
  good health provisions of its policy.
• Although Cullen did not disclose the melanoma
  when applying for additional insurance, the
  medical history supplement on 14 June 1999 fully
  disclosed the condition and treatment.
• With knowledge of the information on the 14 June
  1999 medical history supplement, Valley Forge
  deposited the premium check and processed the
  change of beneficiary request

83
84
HELD Affirmed. (Contd.)

1. The internal memoranda of Valley Forge
   established that it knew that coverage existed at
   the time it wrote Cullen on 21 September 1999
   telling him there was no coverage
2. Purpose may be adjudicated by summary judgment
   when the essential facts are made clear of
   record
3. The purpose of the letter revoking coverage and
   returning the premium was to induce plaintiff to
   accept the returned premium check under the false
   impression that Valley Force was correct in
   claiming coverage never existed.

84
85
Indemnity
85
86
Pennsylvania National Mutual Casualty v.
Associated Scaffolders and Equipment(N.C.App.
2003) (43)
HELD
Trial court correctly ruled that plaintiff did
not have duty to defend insured for liability
assumed by insured under contract that was
determined to be void as against public policy
under G.S. 22-B1.
86
87
TRIAL PRACTICE AND PROCEDURE
87
88
Statutes and Periods of Limitation and Repose
88
89
Bass v. Durham County Hospital Corp. (N.C. 2004)
(44)
Issue When plaintiff obtains 120-day
extension to file medical malpractice suit, then
files within extension but does not include Rule
9 (j) certification, whether amended complaint
with Rule 9 (j) certification relates back so as
to be filed within the statute of limitations?
89
90
FACTS

• Alleged malpractice occurred on 3 August 1996
• Suit filed on 2 December 1999, the last day of a
  120-day extension
• The complaint did not contain the Rule 9 (j)
  certification
• On 13 December 1999, and before responsive
  pleadings filed, the plaintiff filed an amended
  complaint pursuant to Rule 15 (a) with the Rule
  9 (j) certification

90
91
FACTS (Contd.)

• The plaintiff took a voluntary dismissal without
  prejudice on 29 May 2001 and refiled on 12 June
  2001 with the Rule 9 (j) certification
• The trial court granted the defendants motion to
  dismiss
• The Court Appeals reversed on the basis that Rule
  41 allowed the plaintiff to refile within one
  year and the refiled complaint contained the Rule
  9 (j) certification

91
92
HELD Trial court affirmed.

1. Once the 120-day period expires without the Rule
   9 (j) certification, the complaint cannot be
   amended.
2. Relation back is not available since the action
   terminated at the end of the 120-day period
   without the certification
3. The plaintiff was not entitled to the one year to
   refile under Rule 41 because the initial
   complaint was timely filed

92
93
Hatcher v. Flockhart Foods, Inc.,review denied
(N.C.App. 2003) (46)
Issue When defendants insurer responds to
demand letter by plaintiff without identifying
proper insured and party and plaintiff files
timely suit against improper party, whether
defendant and insurer may be equitably estopped
from pleading statute of limitations?
93
94
FACTS

• Plaintiff slipped and fell at Piggly Wiggly store
  in Wallace on 10 July 1997
• Plaintiffs attorney wrote Piggly Wiggly and
  notified them of claim
• Great American as insurer of Piggly Wiggly
  contacted plaintiffs attorney and communicated
  with him over the following 16 months
• As the three-year statute of limitations
  approached, the plaintiffs attorney did a
  corporate search at the Secretary of States
  office and determined that the store was known as
  Wallace Farm Mart, Inc.

94
95
FACTS (Contd.)

• Suit was filed on 30 June 2000 against Wallace
  Farm Mart, Inc., formerly know as Piggly Wiggly
  of Wallace, Inc
• Wallace Farm Mart, Inc., filed motion to dismiss
  based on the statute of limitations on the
  grounds that the store was leased to Flockhart
  Foods
• The plaintiff filed a response pleading equitable
  estoppel
• The trial court dismissed the action

95
96
HELD Reversed.

1. Flockhart Foods permitted Great American to act
   on its behalf, therefore, the actions of Great
   American were imputed to Flockhart Foods
2. The plaintiffs attorney sought to deal directly
   with the party responsible for the store. Great
   American responded on behalf of Piggly Wiggly and
   not on behalf of Flockhart, the party actually
   responsible.
3. . . . since plaintiff justifiably relied on the
   insurers conduct to his detriment, these facts
   are sufficient to create an agency by estoppel.

96
97
Rule 41 Dismissal
97
98
Estate of Barber v. Guilford County(N.C.App.
2003) (48)
Issue When case is settled by mediation and
case then dismissed, and one party fails to
comply with mediated settlement terms, whether
trial court may enter sanctions for failure to
comply with mediated settlement agreement?
98
99
FACTS

• Complaint filed alleging wrongful death
• Counterclaim for defamation and emotional
  distress
• All claims resolved at mediation and parties
  sign settlement agreement
• As part of the settlement agreement, plaintiffs
  estate agrees not to use murderer thereafter
  in connection with actions of deputy sheriff or
  to accuse the deputy sheriff of a crime
• In compliance with the mediated settlement
  agreement, the deputy sheriff dismisses his
  counterclaims with prejudice

99
100
FACTS (Contd)

• On the day that the dismissal was filed, the
  plaintiff calls a news conference, calls the
  deputy a murderer and acknowledges that she
  does not intend to comply with settlement terms
• The deputy files a motion for sanctions for
  violation of the mediated settlement, and, in the
  alternative to set aside the dismissal of his
  counterclaim
• The trial court grants the motion for sanctions
  and orders enforcement for the settlement
  agreement

100
101
HELD Reversed.

• Since the mediated settlement agreement was not
  incorporated into a consent judgment, the deputy
  sheriff was required to initiate a separate
  action or file a motion in the original action.
  Since the deputy had dismissed the claims in the
  original action, he could not move for sanctions
  in that action.
• On remand, the trial court should first consider
  the deputys motion to set aside the dismissal of
  his counterclaims. Depending on the trial
  courts ruling, the deputy would then determine
  where to file a motion for sanctions.

101
102
HELD Reversed. (Contd.)

1. G.S. 7A-38.1 (g) provides only for appropriate
   monetary sanction if a party fails to attend a
   mediated settlement conference without good
   cause. No other sanctions are provided by
   statute. The mediation rules do not provide for
   sanctions if the settlement is not incorporated
   into a consent judgment.

102
103
Centura Bank v. Winters (N.C.App. 2003) (50)
ISSUE When plaintiff had taken two voluntary
dismissals without prejudice for defendants
breach of contract, whether third suit for breach
of contract was barred by Rule 41?
103
104
FACTS

• Parties entered into contract by which defendant
  leased 1995 Lexus.
• Based on defendants default in payments, suit
  filed in March 1997 to recover payments.
  Settlement discussions resulted in plaintiffs
  dismissal without prejudice of suit.
• Defendant did not comply with payments required
  by settlement. Second suit for default in
  payments filed in November 1997. This suit was
  dismissed without prejudice.
• Present suit brought for balance in payments due
  under lease agreement. Trial court rejected
  defendants motion that action was barred by Rule
  41 and granted plaintiffs motion for summary
  judgment.

104
105
HELD Affirmed.

1. Since different amounts were due each time
   plaintiff filed suit, the third suit was not
   based on or including the same claim as the
   first two suits.
2. More than one claim may arise from single
   contract.

105
106
Governmental Immunity
106
107
Batts v. North CarolinaDepartment of
Transportation, review denied (N.C.App. 2003)
(52)
Issue When State is joined as third-party
defendant, whether plaintiff may then amend to
allege claim directly against the State in the
pending civil action?
107
108
FACTS

• The plaintiff , Stacy Batts, was a passenger in a
  car operated by Shawan Batts
• The complaint alleged that the stop sign
  controlling traffic for Shawan Batts was
  obstructed by tree limbs.
• Suit was filed against Mr. Batts and the Town of
  Elm City
• Mr. Batts filed a cross-claim against Elm City
  and a third-party complaint against NCDOT

108
109
FACTS (Contd.)

• The plaintiff then moved to amend her complaint
  to allege a claim directly against NCDOT and to
  dismiss her claims against Elm City
• The trial court denied the States motion to
  dismiss based on sovereign immunity asserting
  lack of jurisdiction since the claim by the
  plaintiff should have been filed in the
  Industrial Commission

109
110
HELD Affirmed.

1. Rule 14 (c) provides that the State may be joined
   as a third-party defendant
2. Rule 14 (a) provides that the plaintiff may
   alleged a claim against a third-party defendant
   arising out of the same transaction or occurrence
   that is the subject matter of the plaintiffs
   complaint
3. Since the Tort Claims Act waived sovereign
   immunity and the legislature allowed the State to
   be joined in a civil action as a third-party
   defendant, Rule 14 (a) allows the plaintiff to
   amend to allege a civil action against the State

110
111
Sanctions
111
112
Board of Drainage Commissioners of Pitt County v.
Dixon (N.C. 2004) (55)
Issue Whether a deponent who appears at his
properly noticed deposition may be sanctioned
under Rule 37 (c) for invoking the Fifth
Amendment in response to questions?
112
113
FACTS

• The complaint alleged that Dove and other
  defendants embezzled money from the plaintiff
• The plaintiffs noticed the deposition of Dove
• Dove answered questions about his name and
  address
• Thereafter, Doves attorney asserted a blanket
  Fifth Amendment privilege
• Dove refused to answer any other questions
• The trial court granted the plaintiffs motion
  for sanctions pursuant to Rule 37 (c), imposed
  sanctions of 2,800 and ordered that Dove be
  deposed and assert any privilege on a
  question-by-question basis

113
114
HELD Sanctions reversed.

1. Since Dove appeared at his deposition, he could
   not be sanctioned under Rule 37 for failure to
   appear
2. The better course would have been for Dove to
   move for a protective order under Rule 26 (c)

114
115
Summey v. Barker (N.C. 2003) (56)
Issue Whether plaintiffs failure to
identify expert witnesses as required by a
scheduling order in a medical malpractice case
subjected the plaintiff to dismissal?
115
116
FACTS

• Prisoner in Forsyth County Jail alleged medical
  malpractice as a result of improper medical
  treatment while in the jail
• The trial court entered a scheduling order
  requiring the plaintiff to identify expert
  witnesses within 30 days after final decision on
  the appeal involving sovereign immunity
• The plaintiff did not identify the experts within
  the time required by the scheduling order
• The trial court granted the defendants motion
  for summary judgment

116
117
HELD Affirmed.

1. Rule 26 (f1) requires a scheduling order in cases
   alleging medical malpractice and allows dismissal
   if a party fails to identify expert witnesses
2. Review of the trial judges order is limited to
   whether the plaintiff demonstrated excusable
   neglect. Since the plaintiff did not allege that
   failure to identify experts was a result of
   excusable neglect, the motion was properly
   allowed.

117
118
Essex Group v. Express Wire Services(N.C.App.
2003) (57)
ISSUE When party responds to discovery after
expiration of the period required to respond,
whether that party may be sanctioned under Rule
37?
118
119
FACTS

• Plaintiff files suit alleging violations by
  defendants of plaintiffs trade secrets.
• Plaintiff obtains order for expedited discovery.
• Evidence indicates that after expedited discovery
  order entered one defendant deleted emails from
  his computer and the other defendant removed
  documents from office. At deposition, defendant
  admitted deleting emails. Other defendant denied
  removal of documents.
• All documents were eventually produced to the
  plaintiff.

119
120
FACTS (Contd.)

• On plaintiffs motion for sanctions, trial court
• Granted sanctions pursuant to Rule 37
• Struck defendants answers and entered default
  judgment and.
• Awarded costs and attorney fees of 7,000.

120
121
HELD Affirmed.

1. Appeal of sanctions was properly before the Court
   of Appeals because striking answer and entering
   default judgment affected a substantial right.
2. This Court has held that failure to answer
   interrogatories or turn over requested documents
   in a timely manner constitutes proper grounds for
   sanctions.
3. Our Court has held that a litigants answering
   of interrogatories after the trial court ordered
   the litigant to answer did not prevent the trial
   court from imposing sanctions upon the dilatory
   party.

121
122
Evidence
122
123
Experts
123
124
Holley v. ACTS, Inc. (N.C. 2003) (59)
Issue Whether expert testimony as to the
possible cause of a medical condition is
sufficient to prove causation?
124
125
FACTS

• Workers compensation injury on 13 July 1996 when
  plaintiff, nurses assistant, twisted leg and
  felt sudden pain in her left calf.
• Emergency room physician, Dr. Ratterree, suspects
  deep vein thrombosis (DVT).
• At hearing, Dr. Ratterree testifies
• a. Low possibility that injury caused DVT
• b. 90 percent or greater of DVT patients have
  suffered no injury
• c. Cannot say to a reasonable degree of medical
  certainty that injury was a significant
  contributing factor in causing DVT

125
126
HELD

1. No competent evidence presented to establish a
   causal connection between the original injury by
   accident to plaintiffs leg on 13 July 1996 and
   her diagnosis of DVT on 3 September 1996.
2. Although expert testimony as to the possible
   cause of a medical condition is admissible if
   helpful to the jury, Cherry v. Harrell, it is
   insufficient to prove causation, particularly
   when there is additional evidence or testimony
   showing the experts opinion to be a guess or
   mere speculation.
3. The entirety of the expert testimony in the
   instant case suggests that a causal connection
   between plaintiffs accident and her DVT, was
   possible, but unlikely.

126
127
State v. Lassiter, review denied (N.C.App. 2003)
(61)
Issue Whether trial court properly allowed
fire expert to testify about experiment he ran to
disprove defendants contention of how fire
started?
127
128
FACTS

• Defendant charged with involuntary manslaughter
  and fraudulently setting fire to and burning a
  dwelling house
• The defendant contended that the fire started in
  a pan of grease
• The States fire and arson expert, Campbell,
  testified that it was impossible for the fire to
  start the way the defendant contended it started
• Campbell ran an experiment in which he attempted
  to ignite vegetable oil. The fire started only
  after Campbell used a plumbers torch

128
129
HELD Affirmed.

1. Campbell was properly allowed to testify as an
   expert. He had 40 years of experience with
   firefighting, training from recognized
   institutions and years of teaching fire
   investigation
2. Once qualified as an expert, it was proper for
   him to testify that it was impossible for
   ignited vegetable oil to have been the source of
   the fire

129
130
Red Hill Hosiery Mill v. Magnetek (N.C.App. 2003)
(62)
ISSUE

• Whether trial court properly admitted opinions
  of Dr. McKnight on origin and cause of fire.

130
131
HELD Affirmed.

1. Dr. McKnight had Bachelors and Masters Degrees
   in Electrical Engineering and Doctorate of
   Physics from Duke.
2. He had over 23 years experience in origin and
   causes of fire and had been recognized as expert
   in several courts.
3. He had examined the product at issue in other
   cases.
4. Based on his educational background and
   expertise, the trial court did not abuse its
   discretion in admitting his testimony. Trial
   court properly performed gatekeeping function.

131
132
Attorney-Client Privilege
132
133
Hulse v. Arrow Trucking Co.(N.C.App. 2003) (63)
Issue Whether testimony by defendant at his
deposition about answers to interrogatories he
wrote and submitted to his attorney waived the
attorney-client privilege?
133
134
FACTS

• The plaintiff alleged that the defendants
  negligence caused an automobile accident
  resulting in injuries to the plaintiff
• The plaintiff submitted interrogatories to the
  defendant requesting the defendant to describe
  how the accident occurred and to give the speed
  and distances of the vehicles involved in the
  accident
• The defendants interrogatory answers referred to
  the speeds and distances on the accident report
  and gave the plaintiffs speed as 55 miles per
  hour
• The defendant was questioned about these answers
  at his deposition

134
135
FACTS (Contd.)

• The defendant testified that he received the
  plaintiffs interrogatories by mail from his
  lawyer, wrote the responses on the
  interrogatories, returned the answers and his
  notarized signature to his lawyer
• The defendant testified at his deposition that he
  had not seen the typed answers until the night
  before his deposition
• The defendant also testified that several of the
  typed answers were not his answer
• It was also discovered during the deposition that
  some of the interrogatory answers had been
  incorrectly typed
• After the deposition, the plaintiff moved for
  production of the defendants handwritten
  responses
• Finding that the attorney-client privilege had
  been waived, the trial court ordered production
  of the responses

135
136
HELD Affirmed.

• Testimony by the defendant at his deposition
  about the answers he wrote and submitted to his
  attorney alone waived the privilege
• This deposition testimony put the contents of the
  answers into evidence
• Although issues involving the attorney-client
  privilege are immediately appealable, waiver of
  the privilege results in the appeal being
  interlocutory. Appeal dismissed.

136
137
Hearsay Relied Upon by Experts
137
138
State v. Thornton (N.C.App. 2003) (66)
ISSUE Whether social worker may testify
about out-of-court statements made to her by
victim?
HELD Affirmed. Statements admissible. Stateme
nts are admissible under Rule 803(4) since made
for purposes of diagnosis and treatment.
138
139
Demonstrations
139
140
State v. Fowler (N.C.App. 2003)review denied
(67)
ISSUE Whether non-expert may use
demonstration before jury to disprove defense
theory of case?
140
141
FACTS

• Defendant charged with first-degree murder.
  Defense was that killing was result of sudden
  impulse and anger.
• States witness demonstrated manner in which
  State contended murder occurred. The
  demonstration showed facts supporting
  premeditation and planning.

141
142
HELD Affirmed. Demonstration admissible.

1. Demonstrator need not be expert, but proper
   foundation must be laid as to the demonstrators
   familiarity with the facts.
2. When evidence is conflicting, demonstration may
   be used to illustrate flaws in the prosecution
   or defense theory or to rebut a witnesss
   testimony.
3. A demonstration is not inadmissible because it
   goes to the heart of the . . . issue.

142
143
Costs
143
144
Department of Transportation v. Charlotte Area
Manufactured Housing, Inc. (N.C.App. 2003) (68)
Following the explicitly delineated approach
and holding that only those costs specified in
G.S. 6-1, 6-20 and 7A-320 may be taxed.
144
145
Cosentino v. Weeks (N.C.App. 2003) (69)
Affirming trial courts denial in its discretion
of defendants motion in voluntarily dismissed
medical medical malpractice case to tax as costs
expert witness fees, deposition transcripts,
court reporter fees and deposition-related
attorney travel expenses.
145
146
G.S. 97-10.2
146
147
Ales v. T.A. Loving Co.(N.C.App. 2004) (70)
Issue Whether superior court had
jurisdiction under G.S. 97-10.2 to approve
third-party settlement contingent upon waiver of
the workers compensation lien?
147
148
FACTS

• Plaintiff injured in course and scope of
  employment with Columbus Hospital
• Present suit was against Loving, general
  contractor for Hospital, and Shields, flooring
  subcontractor
• Plaintiffs workers compensation claim against
  the hospital settled by clincher agreement for
  lump sum payment of 120,000
• Plaintiff reached a mediated settlement with
  Loving and Shield for 145,000 contingent upon
  waiver of compensation lien
• On plaintiffs motion, the trial court ordered
  that the lien be waived

148
149
HELD Reversed. Trial court did not have
jurisdiction.

1. G.S. 97-10.2 allows superior court to adjust
   the workers compensation lien if the agreement
   between the parties has been finalized so that
   only performance of the agreement is necessary to
   bind the parties.
2. An agreement with a condition precedent