Arbitration – Motion to Compel – Insurance – Auto — UIM – Exhaustion of Liability Coverage

Creed v. Smith (Lawyers Weekly No. 12-07-0867, 11 pp.) (Linda McGee, J.) Appealed from Catawba County Superior Court. (Timothy S. Kindcaid, J.) N.C. App.

Holding:  Plaintiff’s motion to compel arbitration should have been granted because his insurance company’s liability limits had been “exhausted” for the purposes of G.S. § 20-279.21 and the underinsured motorist policies of plaintiff and his employer.

Plaintiff was driving a vehicle owned by his employer in February 2008 when he was involved in a collision with another motorist. Because plaintiff was driving in “the course and scope of his employment,” his employer’s underinsured motorist policy applied, as did a UIM policy plaintiff held in addition to his regular car insurance. Defendant, the driver’s main car insurance company, tendered its liability limits of $50,000 in return for a covenant not to enforce judgment with plaintiff. Per the UIM policy requirements, plaintiff’s counsel notified the other two insurance companies of the tender and then requested binding arbitration in the case. The trial court denied the motion to compel arbitration.

We reversed. The driver’s main car insurance coverage was exhausted when the full amount of the policy was tendered, not paid. The motion to compel arbitration with the UIM holders, then, was timely and should have been granted.