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arbitrationmotionsustainedarbitratordeclaratory judgment
contractplaintiffdefendantarbitrationattorneymotionwillarbitratordeclaratory judgment

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Campbell v. State Farm Mutual Automobile Insurance Company, Not Reported in Fed. Supp., 2019 WL 1532229

Facts

On August 18, 2017, David Campbell was involved in a bicycle accident, claiming he was struck by an unidentified vehicle. He sustained severe injuries and was insured under a State Farm policy that provided UM coverage. After notifying State Farm of his claim, the insurer concluded that it was unlikely Campbell was hit by an unidentified vehicle, leading to a dispute over coverage. Campbell filed a complaint seeking to compel arbitration and a determination of his entitlement to UM benefits.

At the time of the accident, Campbell was insured under State Farm Policy Number 301 3161-D03-33X ('the Policy'), which provided $ 250,000 per person and $ 500,000 per accident in uninsured motorist ('UM') coverage.

Issue

Whether David Campbell is entitled to uninsured motorist coverage under his State Farm insurance policy given the circumstances of the accident.

The issue of whether a vehicle is uninsured is not arbitrable under the Policy.

Rule

Under North Carolina law, uninsured motorist coverage requires physical contact between the insured's vehicle and the hit-and-run vehicle for coverage to apply.

Insurance policies are contracts under North Carolina law, and as such, their interpretation is a question of law for the court.

Analysis

The court analyzed the definition of 'uninsured motor vehicle' in the policy, which necessitates contact for coverage to be triggered. Since State Farm contended that Campbell was not hit and likely had a single-bicycle accident, the court determined that the issue of whether the vehicle was uninsured must be resolved before arbitration could take place. The court emphasized the importance of judicial economy in resolving the coverage issue first.

The Court finds that it is in the interest of judicial economy for the Declaratory Judgment Action to resolve the issue of UM coverage before sending the parties to arbitration.

Conclusion

The court granted State Farm's motion to stay the proceedings pending a declaratory judgment on the issue of UM coverage and denied Campbell's motions to compel arbitration and appoint an arbitrator.

Therefore, the Court will grant 'Defendant State Farm Mutual Automobile Insurance Company's Motion to Stay Pending Declaratory Judgment,' Doc. 7.

Who won?

State Farm prevailed in this case because the court found that the issue of whether Campbell was entitled to UM coverage needed to be resolved before arbitration could occur.

The Court will deny without prejudice Plaintiff's 'Motion to Stay Proceedings and to Compel Arbitration,' Doc. 4, Plaintiff's 'Motion to Appoint Arbitrator,' Doc. 5, Plaintiff's 'Motion to Stay Initial Attorney's Conference,' Doc. 6.

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