Tort/Negligence – Auto Accident – Unfair Trade Practices – Insurance – Privity of Contract

Plaintiffs have not obtained a judgment against the owner and driver of the vehicle that caused the underlying accident, and the allegations in plaintiffs’ complaint show that plaintiffs never came to a meeting of the minds in their settlement agreement with those defendants’ insurer. Consequently, plaintiffs lack standing to sue the insurer as either a third-party beneficiary of defendants’ insurance policy or as parties to a settlement contract with the insurer.

We affirm the trial court’s grant of the insurer’s motion to dismiss.

A third-party claimant must first obtain a judgment against the insured before pursuing a direct unfair trade practices claim against the insurer. Plaintiffs have not done so here; instead, they sued both the tortfeasors and their insurer in a single complaint.

Plaintiffs allege actual contractual privity with the insurer based on their settlement agreement. However, their allegations go on to show they never had a meeting of the minds with the insurer.

As a result of their settlement negotiations, plaintiffs believed the insurer would repair their car with new parts, while the insurer intended to utilize used parts, in accordance with its standard policy. Moreover, plaintiffs never cashed the insurer’s check, believing that endorsing the check would have discharged their claims against the insurer and precluded them from initiating this action. Plaintiffs also alleged that the insurer tried to settle their claim without reimbursing them for certain rental car charges.

Because the allegations of the complaint do not demonstrate the acceptance of an offer, plaintiffs failed to establish the formation of a contract with the insurer.

Plaintiffs lack standing to sue the insurer for unfair trade practices.

Affirmed.

Lira v. Felton (Lawyers Weekly No. 012-021-23, 17 pp.) (Valerie Zachary, J.) Appealed from Harnett County Superior Court (Dawn Layton, J.) Milton Barba for plaintiffs; Robert Ruegger for individual defendants; no brief filed for National General Insurance, Inc. N.C. App. Unpub.