Mitchell v. Nationwide Mutual Insurance , 335 N.C. 433 ( 1994 )

WEBB, Justice.

This case brings to the Court yet another stacking case. We hold that pursuant to Harrington v. Stevens, 334 N.C. 586, 434 S.E.2d 212 (1993), we are bound to affirm the Court of Appeals.

In Harrington, we held that N.C.G.S. § 20-279.21(b)(3) and N.C.G.S. § 20-279.21(b)(4), as they were in effect for that case and for this case, required that a person living in the household with relatives be allowed to aggregate or stack, both interpolicy and intrapolicy, the underinsured motorist coverages of the relatives and to collect on those stacked coverages. Under this holding, the defendant is liable to the plaintiff on his mother’s policy.

The only distinction between this case and Harrington is that as to the Stewart policy, the plaintiff was an insured of the second class. The injured party in Harrington was an insured of the first class on all policies. We hold this is a distinction without a difference. There is nothing in N.C.G.S. § 20-279.21 which indicates that if a person is otherwise covered as a first class insured he loses this coverage if he is covered as a second class insured on another policy. See Crowder v. N.C. Farm Bureau Mut. Ins. Co., 79 N.C. App. 551, 340 S.E.2d 127 (1986).

The defendant also argues that it is not liable for any further payment to plaintiff because of the following provision in the policy of the plaintiff’s mother.

Any amounts otherwise payable for damages under this coverage shall be reduced by all sums:

1. Paid because of the bodily injury or property damage by or on behalf of persons or organizations who may be legally responsible. . . .

The defendant says it is entitled to deduct, under the policy of defendant’s mother, $25,000 which was paid on the tortfeasor’s policy and $25,000 which was paid on the underinsured motorist coverage under the Stewart policy. It says this is so because both these payments were made “on behalf of persons or organizations who” were legally responsible for the payments. We reject this argument for the reason stated in Harrington, 334 N.C. at 592, 434 S.E.2d at 214.

The defendant argues further that it is not liable for any payment to the plaintiff because of a provision in the policy of the plaintiff’s mother which reads as follows:

The most we will pay under this coverage is the lesser of the amount by which the:

a. limit of liability for this coverage; or

b. damages sustained by the covered person for bodily injury;

exceeds the amount paid under all bodily injury liability bonds and insurance policies applicable to the covered person’s bodily injury.

The defendant contends this clear language of the policy provides that it shall pay only a sum by which its coverage exceeds payments under the Lopez and Stewart policies. The defendant argues that a total of $50,000 was paid by the Lopez and Stewart policies and the limit of its liability on the policy of the plaintiff’s mother was $50,000. Its liability does not exceed the amount paid on the other two policies, says the defendant, and for this reason it does not owe anything to the plaintiff under the terms of the policy.

If the defendant is right in this argument, this policy provision is contradicted by N.C.G.S. § 20-279.21(b)(4) which provided that underinsured motorist coverage “is determined to be the difference between the amount paid to the claimant pursuant to the exhausted liability policy and the total limits of the owner’s underinsured motorist coverages provided in the owner’s policies of insurance[.]” N.C.G.S. § 20-279.21(b)(4) (1985). This definition is a part of the policy of the plaintiff’s mother and it overrides any contrary terms of the policy. Insurance Co. v. Chantos, 293 N.C. 431, 238 S.E.2d 597 (1977). The defendant is liable to the plaintiff for $50,000 under this definition.

For the reasons stated in this opinion, we affirm the Court of Appeals.

AFFIRMED.