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Insurance – Auto – UIM – Subrogation – Civil Practice – Statute of Limitations

Nationwide Mutual Insurance Co. v. Erie Insurance Co. (Lawyers Weekly No. 11-16-1260, 8 pp.) (Linda M. McGee, J.) Appealed from Wake County Superior Court. (Carl R. Fox, J.) N.C. App. Unpub. Click here for the full-text opinion.

Holding: In this subrogation action, the plaintiff-insurer has no greater rights than its insureds. Since plaintiff filed this action more than three years after the accident from which it arose, plaintiff’s claim is time-barred.

We affirm the trial court’s order granting defendants’ motion to dismiss.

Plaintiff seems to argue that it qualifies as an “innocent victim” of the accident because plaintiff suffered financial harm therefrom. However, the purpose of the Financial Responsibility Act has always been to protect innocent motorists from financially irresponsible motorists. Plaintiff is not an “innocent motorist” under the Act.

The victims in the underlying tort are not parties to this action, and they would derive no benefit were we to decide in favor of plaintiff. Plaintiff thus is not given the benefit of “liberal construction” of the Act.

We find nothing in G.S. ¤ 20-279.21(b)(4) granting plaintiff a direct cause of action against the defendant-insurers. Reimbursement by defendants to plaintiff is not presumed in the statute, and under G.S. ¤ 20-279.21(b)(4), plaintiff’s only relevant right against defendants related to the accident  was  subrogation.

Plaintiff could have filed a declaratory judgment action when it discovered that defendants had refused coverage for their insured – before the statute of limitations had run. Plaintiff could have attempted to bring defendants into the underlying action. Plaintiff did neither.

Plaintiff, having stepped into the shoes of its insureds through subrogation, acquired no greater rights than those of its insureds. The accident at issue occurred on Oct. 7, 2006. The statute of limitations on the action arising out of the accident was three years.

Plaintiff filed its complaint in this matter on March 4, 2010, more than three years after the accident. Because plaintiff did not file its action within the three-year statute of limitations, the trial court did not err in granting defendants’ motion to dismiss.


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