WOOD V. NUNNERY | UIM COVERAGE | PAYMENT OF JUDGMENT BY UIM CARRIER

In Wood v. Nunnery, (2012), the Court addressed the effect of a UIM carrier's payment of a judgment.

In this case, the jury awarded $300,000 to the plaintiff. The liability carrier paid $30,000 to the Clerk, and the UIM carrier paid $202K into the Clerk's office. The plaintiff had also received $148K in work comp benefits, the lien on which (by agreement) was $50K. The trial court ruled that the judgment was entirely satisfied. The Court of Appeals, however, reversed, finding that the UIM carrier's payment does not reduce the judgment. " Because of this statutory right of subrogation, defendant cannot be entitled to a credit against the judgment for payments made by Firemen's as a UIM carrier." "In this case, the judgment was entered only against defendant. It was not entered against Firemen's. By the plain language of N.C. Gen. Stat. 1-239, defendant is responsible for satisfying the judgment entered against him. The only payment to which defendant is entitled to a credit against the judgment is the $30,000.00 paid by State Farm, defendant's liability insurance carrier." The court also ruled that the plaintiff was not entitled to know whether the UIM carrier agreed to waive subrogation rights.

This case highlights one of the oddities of North Carolina UIM law. The precise role of the UIM carrier in the action is not clear, as it is not a party to the action. The effect of the judgment is likewise not clear, nor the effect of the payment of the judgment by the UIM carrier. One could argue that the UIM carrier should not pay money to the clerk on the judgment at all.

On February 18, 2014, the Court of Appeals addressed a subsequent issue raised in this case. On further appeal, the Court addressed whether the Defendant was entitled to a credit for the amount paid by the workers compensation carrier (in addition to the amount paid by the UIM carrier). The court held that the defendant was not entitled to such a credit; he was entitled to a credit only for the $30,000 paid by his own liability carrier.