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Case Summary: Insurance Policy Determines Recovery


N.C. Farm Bureau Mutual Insurance Co. v Jarvis
2015 N.C. App. 935 (2015)
North Carolina Court of Appeals


This case arose out of a dispute over insurance coverage from a single vehicle accident causing serious injuries. The four auto insurance policies which are in dispute include: one which identifies the driver and the vehicle involved in the accident as insured, and three other insurance policies which do not list the driver or the vehicle, but list members of the driver’s extended family. The defendants are Jeremiah Jarvis, a minor passenger riding in the vehicle and Melissa Shuler, his mother (the defendants). The driver of the vehicle was Jarrett Carland (Jarrett) and his mother, Elana Carland (Elana) owned the vehicle. The defendants sued the plaintiffs, N.C. Farm Mutual Insurance Co. (Farm Mutual), to recover amounts on the policies held by the Carlands.

Procedural History

Following the injuries that Jeremiah received in the accident, the defendants filed a lawsuit against the driver Jarrett and his mother Elana. They alleged gross negligence and sought damages based on the injuries sustained by Jeremiah from the accident. At a motions hearing, the Henderson County Superior Court granted the plaintiff’s motion for summary judgment. It is from that order that the defendants appealed. There were a number of issues that the defendants sought review of, but the crux of the argument centered on who was specifically insured and for what amounts they were covered.


The facts at trial tended to show that Jarrett was driving a 1997 Ford Explorer owned by his mother, Elana, and Jeremiah was a passenger in the vehicle as well. When Jarrett lost control of the vehicle, it left the roadway and struck a tree. Jeremiah and Jarrett both had serious medical injuries, with Jarrett’s being especially severe, ultimately resulting in the appointment of a guardian ad litem on his behalf. In North Carolina, a guardian ad litem is a trained volunteer, appointed by a district court judge to perform investigations and determine the needs of abused and neglected children.

At issue in this case are four insurance policies, all underwritten by Plaintiff-Appellee. The first policy covers three separate vehicles, including the 1997 Ford Explorer that Jarrett was driving when the accident occurred. Although the first policy lists three covered vehicles, Elana paid separate premiums for each vehicle listed. The Declarations page of the first policy listed the three covered drivers as Jarrett, Elana, and Victoria Carland. The first policy stated that its limits of liability included $50,000.00 for bodily injury for each person, with a total limit of $100,000.00 per accident. Property damage was limited to $50,000.00 per accident. This policy provided uninsured and underinsured liability in the amount of $50,000.00 for bodily injury of each person and $100,000.00 per accident.

The “Limit of Liability” provision explicitly stated its maximum limits for all damages related to personal injury from one accident, “regardless of of the number of: 1. Insureds; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the autoaccident.”

There were three other policies held by Jarrett’s father, Charles Carland (Charles). The second policy identified two covered vehicles, but neither was the 1997 Ford Explorer. The third policy was issued in the name of Charles’s step-children. The fourth and final policy was issued to Carlands Dairy Inc., which is a dairy farm owned and operated by Charles. The covered vehicle listed under the policy was a Ford 150 truck and the named insured was Charles. These policies did not list Jarrett as the insured and did not cover the Explorer in the accident. As a result, these policies do not apply to claims arising from the accident with the Explorer.

Since only the first policy would then apply to the accident, the defendants wished to “stack” the $50,000 per person limit for each vehicle under the first policy. Essentially, the defendants argued that they should be allowed to add the limits of vehicle covered by the policy for a total of $150,000.00.

Governing Law

In North Carolina, the standard of review of an appeal from a summary judgment order’s de novo. De novo means the matter is considered anew, such that the Court of Appeals analyzes all of the evidence with no conclusions asserted. The granting of such judgment is appropriate only when the record shows that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. N.C. Gen. Stat. §1A-1, Rule 56.

The North Carolina Supreme Court has addressed almost the exact language of such automobile insurance policies before, in Lanning v. Allstate Ins. Co., 332 N.C. 309 (1992). The Court noted that the language in Lanning expressly provided a “maximum limit of liability” of $50,000 “sustained by any one person in any one autoaccident” and provided “the limit of bodily injury liability shown in the Declarations for each accident, $50,000, is our maximum limit of liability for all damages for bodily injury resulting from any one accident.” Id. at 317, 420 S.E.2d at 185.

The policy in Lanning contained similar language in its limitation of liability provision as well, and stated, “This is the most we will pay for bodily injury… regardless of the number of: 1. Insureds; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the accident.”

The Court found that the Lanning policy “plainly and unambiguously precludes the aggregation of underinsured motorist coverages under its policy,” and that “plaintiffs’ per accident underinsured motorist coverage under that policy is limited to $50,000.” Id. Thus, the North Carolina Supreme Court’s ruling in Lanning required the same conclusion in this case.

Because the language in the first policy specifically limited the maximum liability to $50,000 per person and $100,000 per accident, regardless of the number of insureds or vehicles listed, the defendants were not entitled to aggregate the liability limits based on the number of vehicles listed. Summary judgment was appropriate regarding Farm Mutual’s obligations under the first auto insurance policy.


Based on the existing North Carolina case law in Lanning, the Court of Appeals upheld the trial court’s grant of summary judgment for Farm Mutual.

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